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Most Tax Experts Believe in Estate Tax Worst Case Scenario for 2011

By Greg Herman-Giddens

My former colleague and attorney Julie Garber recently sent the following email to over 50 attorneys, trust officers and accountants located throughout the U.S.:

"Hi, I am conducting a straw poll on the estate tax for my blog. The question is what do you think Congress is going to do with the estate tax in 2010 and here are the choices for answers:

A. Nothing, tax will come back on Jan. 1, 2011 with $1 million exemption, 55% tax rate

B. Reinstate tax at 2009 levels ($3.5 million exemption, 45% rate) and make it retroactive to Jan. 1, 2010

C. Reinstate tax at 2009 levels ($3.5 million exemption, 45% rate) and not make it retroactive to Jan. 1, 2010

D. Reinstate tax at 2009 levels ($3.5 million exemption, 45% rate) and give heirs of decedents who die in 2010 but prior to enactment of the new law the choice between using the modified carryover basis and the new law

E. Something else - please describe"

The results of the poll:

• 68% chose A
• 11% chose B
• 7% chose C
• 7% chose D
• 7% chose E

I personally chose A - I was somewhat surprised to see such a high percentage of my colleagues agreed.  Many of my clients are more optimistic, which may be to their peril if the fail to plan properly as a result.

Full post as published by North Carolina Estate Planning Blog on July 30, 2010 (boomark / email).