The senate has overwhelmingly passed the bill to extend the Bush era tax cuts.
The house HAS NOT but it continues to appear they are likely to pass it—-but not without significant added earmarks. A vote is still expected this week.
When the bill finally passes it appears the income tax portion will pass with laws approximately as they now exist.
In regard to the estate and gift taxes the exemption increases to $5,000,000 per individual in the senate version. In addition the bill includes a provision to increase the lifetime gift tax exclusion to the same $5,000,000, up from $1,000,000 in 2010 to the $5,000,000 beginning in 2011. These increases mean that a couple with a $10,000,000 estate will pay no estate or gift taxes. THIS IS HUGE IF IT STAYS IN THE BILL.
If one is contemplating any large taxable year end gifts we suggest you wait as late as possible in 2010 to determine if the gift should be in 2010 or 2011. USE caution on this and visit with us as soon as possible to discuss the best timing decision for you.