Congress passes compromise tax package

The compromise tax package negotiated by the White House and Senate Republicans was signed into law by  President Obama on Dec. 17. The bill cleared the Senate Dec.15, with an 81-19 vote. The House went passed the bill late Dec.16, by a margin of 277-148. Craig J. Regelbrugge, vice president of government relations at ANLA provided this update.

 

Surprisingly, the bill does not include a repeal of the health care Form 1099 requirement, despite considerable bipartisan support for repealing this measure. 

But it does include an extension of the Bush-era tax cuts for all income levels, and it temporarily resolves the estate tax issue.

 

There is a two-year extension of estate, gift and generation skipping transfer tax relief.

The EGTRRA phased out the estate and generation-skipping transfer taxes so that they were fully repealed in 2010, and lowered the gift tax rate to 35 percent and increased the gift tax exemption to $1 million for 2010. The proposal sets the exemption at $5 million per person and $10 million per couple and a top tax rate of 35 percent for the estate, gift, and generation skipping transfer taxes for two years, through 2012. The exemption amount is indexed beginning in 2012. The proposal is effective January 1, 2010, but allows an election to choose no estate tax and modified carryover basis for estates arising on or after Jan. 1, 2010 and before Jan. 1, 2011. The proposal sets a $5 million generation-skipping transfer tax exemption and zero percent rate for the 2010 year. 

 

Read more about the estate tax relief and other cuts here.