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Articles Summary of Gift and Estate Tax Provisions of New Lawby Paul H. Burnham, Esq. 1. The estates of those who die in 2010 will be subject to the federal estate tax (at 2001 rates) unless an election is made by the Executor to have the federal estate tax not apply. This provision means that only in the case of larger estates does the Executor have to do anything - thus the old carryover basis rules will in most cases apply automatically. 2. The estates of those who die in 2011 and thereafter (until the law is changed again) will be subject to the federal estate tax but only if the assets left to someone other than a spouse or charity is more than $5,000,000. The $5,000,000 amount increases in line with inflation in future years. 3. The federal estate tax rate is now a flat 35%. 4. The gift tax is now imposed only if lifetime gifts exceed $5,000,000 (adjusted for inflation), which is an increase from the current $1,000,000. 5. The $5,000,000 exemption is portable, meaning that if not used in full by the first spouse to die, the unused portion may be used by the surviving spouse. 6. The old carryover basis rules will apply for assets passing from someone dying in 2011 or thereafter.
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