Estate Tax Odyssey 2010 Part III
Well it is 2010, and the legislative branch balked on the issue of the estate tax for 2010. So, as it stands 2010 is still an estate tax-free year--for NOW. But, there is much talk that a law may be put in place that would be retroactive back to January 1, 2010.
Whatever the government decides to do with the estate tax issue this year, (or not), it will be interesting to watch. Perhaps the only thing more interesting than how the estate tax issue plays out this year, is how it will play out in 2011.
An article posted on Forbes discusses how in some extreme cases, making gifts right now might be tax advantageous. I think another practical issue regarding gifting strategies deals with the fact that some assets, particularly real estate, may be valued at very low levels, so if you do make a gift, given the reduced property values, your gift is of less value.
Given the state of the economy, the unknown nature of the future of the estate tax, and whether the estate tax will be applied retroactively in 2010, any decisions in regards to gifting and estate planning should be analyzed in relation to the objectives of the parties involved. What might be beneficial to do for one estate may not be beneficial for another--based upon the size of the estate and the basis in the estate's assets (that are considering to be gifted, for example)..
