Loophole Ends Estate Tax for 2010

Ad Feedback

The repeal of the controversial estate tax that took effect for the new year is raising new questions about life -- and death.

It is a happy new year to America's wealthiest citizens. The dreaded estate tax is dead, at least for the next 12 months.

So what does that mean?

"Somebody who dies this year, as opposed to next year with no change in the law could save 60 percent in value passing to their family," said estate tax planner Andrew Katzenstein. "It's a huge number."

The estate tax is a tax on an inheritance of $3.5 million or more.

Some Americans think it is unfair to tax a person after they have died and that it unfairly burdens farmers and small business owners, thousands of whom have land or businesses worth millions, but do not have money in the bank to pay the tax. As a result, it leaves some families with no choice but to liquidate their business or sell the family farm to pay the government.

Just one percent of Americans are wealthy enough to have to pay the estate tax, but it generates lots of cash for the Fed. Not collecting the tax this year will cost the treasury an estimated $14 billion.

Congress is scheduled to reinstate the tax in 2011 and dramatically shrink the exemption from $3.5 million to $1 million.

It is a move that will potentially raise end of life questions for wealthy heirs. If the people with the power to pull the plug stand to save 60 percent of their inheritance if their loved one dies before the new year, that could affect the timing of the decisions they make about life and death.

"It's now becoming part of the discussion that people are having in trying to determine whether or not they should end somebody's life or continue it," Katzenstein said.

It is perhaps an unintended reality of this year's reprieve from what some call the death tax, it is one critics are sure to argue as Congress works to reinstate it in time for the next new year. 

Log in or create an account to post a comment.  


Are you seeking answers in life? Are you hurting? Are you facing a difficult situation?

Find peace with God, discover more about God or send us your prayer request.

Call The 700 Club Prayer Center at 1 (800) 823-6053, 24 hours a day.

A caring friend will be there to pray with you in your time of need.

CBN News
Jennifer Wishon

Jennifer Wishon

CBN News White House Correspondent

Jennifer Wishon is the White House correspondent for CBN News based in the network’s Washington, D.C. Bureau.  Before taking over the White House beat, Jennifer covered Capitol Hill and other national news, from the economy to the 2010 oil spill in the Gulf of Mexico. Follow Jennifer on Twitter @JenniferWishon and "like" her at Facebook.com/JennWishon.