Federal Estate Tax Action Uncertain in the Senate

The Senate may not take any action on the Federal Estate Tax issue. The House has passed their version of the Estate Tax bill, effectively freezing the $3.5 Million exemption and 45% tax rate we have currently. CCH, a respected tax reporting company is reporting that the Senate may drag their feet.

Here is a short excerpt from the article you can read here:

The likelihood that the Senate will act on extending the estate tax before it expires at the end of 2009 remains uncertain as health care reform dominates lawmakers’ attention. Senate Democratic leaders are racing to complete work on health care reform by the end of 2009 as they plan to work on weekends and possibly through the Christmas recess to reach that goal.

Senate Majority Leader Harry Reid, D-Nev., huddled with House leaders on December 3 to discuss the estate tax bill, but following the meeting, Reid as much as admitted that there was no time to pass the legislation this year. One option reportedly under consideration, however, is a one-year extension of the estate tax at current 2009 levels that could be attached to an anticipated omnibus appropriations bill.

The Permanent Estate Tax Relief for Families, Farmers, and Small Businesses Bill of 2009 (HR 4154) approved by the House on December 3 (TAXDAY, 2009/12/04, C.1) is an unlikely candidate for Senate approval even if the chamber found the time to take it up. One problem with the House bill is that the $3.5-million exemption limit is not indexed for inflation. Both Senate Finance Committee Chairman Max Baucus, D-Mont., and Senate Budget Committee Chairman Kent Conrad, D-N.D., have said that the exemption should be indexed for inflation.