Most importantly the bill ended the uncertainty and thorny issues that many middle class estates for 2010 deaths were going to have. Essentially the bill created an option for 2010 deaths to utilize the existing no estate tax but limited step up in basis rules or use the new 2011 and 2012 rules which consist of a $5 million dollar Applicable Exclusion Amount for individuals with a 35% for anything above the AEA.
This bill is a blessing for middle class estates because they will now be able to shelter $5 million free from the Estate and Generation Skipping Transfer Taxes and keep an unlimited step-up in basis. This means beneficiaries and heirs selling inherited property will be able to do so capital gains tax free.
Many heirs of High Net Worth individuals who passed in 2010 will likely choose to use the old no estate tax system even with its limited step up in basis for capital gains because the long term capital gains rate is 15% instead of the 35% rate for estate taxes.
But for middle class families the new legislation is a blessing as it vastly simplifies things. Most families will now owe no Estate Taxes for 2010 deaths and be able to sell inherited property with a stepped-up basis. Additionally, this will avoid the issue of trying to prove the basis of property acquired by a decdedent decades ago. This has surely made life easier for heirs and IRS agents alike.
ABOUT CHRISTOPHER R. TWINING: Christopher R. Twining, Attorney at Law, based in the Westwood Neighborhood of Los Angeles is an innovative estate planning, probate & trust administration, and elder law attorney, who offers in home services for busy and movement challenged clients. The Law Office of Christopher R. Twining serves the cities of Los Angeles, Santa Monica, Culver City, Beverly Hills, West Hollywood, Pasadena, Burbank and the neighborhoods of West Los Angeles, Westwood, Brentwood, Bel-Air, Pacific Palisades, Palms, Pico-Robertson and Encino. Dedicated to helping individuals and couples prepare comprehensive estate plans according to their wishes; he offers them these services at an affordable price, in the relaxed comfort of their homes. For more information about his services, please visit http://www.twininglaw.com or call (310) 492-5990
CHRISTOPHER R. TWINING
LAW OFFICES OF CHRISTOPHER R. TWINING1440 VETERAN AVENUE, SUITE 509LOS ANGELES, CALIFORNIA 90024(310) 492-5990 Fax (310) 775-9774http://www.twininglaw.com
