La Quinta heirs could benefit in 2010 thanks to a lapse in the estate tax law. Depending on how you look at it, no estate tax could be good news or could be bad news.
Thanks to politics, 2010 is a leap year that the estate tax was allowed to lapse. Back in the President George W. Bush era, the estate tax rate was lowered in 2001 from 55 percent to 45 percent and the amount an individual can pass on without incurring the tax went from $1 million to $3.5 million.
When it was approved, the tax was scheduled to expire at the end of 2009, then resume in 2011 at its previous, higher rate. Lawmakers deadlocked and never agreed on new legislation.
Consequently heirs have received a brief pardon before new legislation begins in 2011. This is the first time in almost 100 years for a lapse in estate taxes. However, 2011 will set estate tax levels even higher than they had been before the cuts.
Source: The Desert Sun, July 18, 2010