The new federal tax law presents an extraordinary wealth transfer opportunity, but the generation-skipping transfer tax sale ends December 31, 2010.
It’s old news now that late last year the U.S. Congress allowed the estate and generation-skipping transfer (GST) taxes to lapse for 2010. You’ve likely read reports of the several billionaires who died in 2010 and left estates that escaped estate tax.
On Friday, December 17, 2010, President Obama signed into law a tax bill that resolves—at least temporarily—much of the uncertainty regarding the transfer tax system. If Congress had not acted before year end, on January 1, 2011, the estate tax would have returned after the 2010 “gap” year to 2001 law, which imposed the estate tax at a top tax rate of 55 percent to be applied after an exemption of $1 million. Back too would have been the GST tax at a flat 55 percent rate, and the gift tax rate, which today is imposed at 35 percent, would have risen to a top rate of 55 percent.
The new tax law provides for the following...
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