Here is a detailed Explanation of the Estate and Gift Tax Changes:
2010
Estate Tax
*Basic exclusion amount: $5,000,000 Formerly called applicable exclusion amount
Unified credit: $1,730,800
*Maximum tax rate: 35%
Level where 35% rate begins: $500,000 But no tax until taxable estate + gifts > $5m
* Step-up in basis: Full step-up, unless estate elects out of estate tax
State death tax deduction: Still available on Line 3b (as it was in 2005-2009)
*Due date: No earlier than nine (9) months after date of enactment
*Carryover basis: Applicable only if estate elects out of estate tax
*Max basis increase available: $1.3m (plus $3m for property passing to spouse)
*Due date of new form (8939): No earlier than nine (9) months after date of enactment
Penalty for failure to report to the IRS: $10,000 per failure
Penalty for intentional disregard: 5% of FMV of property
Penalty for failure to report to beneficiaries/donee: $50 per failure
Capital gains tax rate: Proceeds in excess of adjusted tax basis subject to tax at the
applicable capital gains rate when sold (currently 15%).
Gift Tax No change
Exclusion amount: $1,000,000 (no change)
Maximum tax rate: 35% (no change)
Due date: April 18, 2011 (Emancipation Day observed on Friday, April 15, 2011)
see: http://www.TaxEsq.com
