2010 Federal Estate Tax Update with Michigan’s Carl Levin

Michigan’ Senator Levin is on the Senate committee that will work to retroactively reinstate a federal tax on multimillion-dollar estates that expired Dec. 31. The Federal legislation, most likely, will seek an extension of a 2009 law, which applied a 45 percent tax rate on the value of estates that exceeded $3.5 million per individual.

“The sooner we do it, the better,” Levin said in the Business Week article, which you can read at Levin Says House to Begin Extension of Bush Tax Cuts.

Because the governement took no action at the end of 2009, the estate tax was replaced Jan. 1 with a capital gains tax that requires heirs pay rates of between 15 percent and 28 percent on any bequeathed assets they sell.

The tax is complicated because it applies to all profit since the assets were acquired by their original owners.