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ADLER & ASSOCIATES - News
Congress has passed the new $1.3 Trillion Dollar tax reduction. A major reform of the Estate Tax rules. Have been changed. In the year 2002 the amount exempt from estate tax is increased from $700,000 per person ($1.4M for a married couple with an A-B Trust) to $1,000,000 per person estate tax free. In 2005, the exemption rises to $1,500,000, 2006 - $2,000,000. In 2009 the exemption reaches $3,500,000. In 2010 there is no estate tax, however, beginning in the year 2010, the "stepped up" basis or forgiveness of capital gains on both halves of Community property will cease and there will be no step up in basis on the surviving spouse's portion of community property. Instead the last spouse to die and single persons will have captial gains tax forgiveness only the first $1.3 million dollars of appreciated assets. However, the first spouse to die has an additional $3,000,000 forgiveness, for a total of $4,300,000 of capital gains tax free assets if left to the surviving spouse. In 2011, the exemtion decreases to only $1,000,000 per person. See below. Thank you!
Year Tax Free Tax Rates2001 $675,000 37 - 55%
2002 $1,000,000 37 - 50%
2003 $1,000,000 37 - 49%
2004 $1,500,000 37 - 48%
2005 $1,500,000 37 - 47%
2006 $2,000,000 37 - 46%
2007 $2,000,000 37 - 45%
2008 $2,000,000 37 - 45%
2009 $3,500,000 37 - 45%
2010 NO LIMIT -0-
UNLESS EXTENDED REVERTS TO OLD LAW
Sunset Provision 2011 $1,000,000 41 - 55%
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