Extenders/Estate Tax Reform Sidelined

Before recessing, Congress failed to pass permanent estate tax reforms or to extend important expiring provisions. Expiring individual tax provisions include: (1) sales tax deductions; (2) combat pay qualification for the EITC; (3) above-the-line deductions for teacher expenses; and (4) medical savings accounts.

Expiring business-related provisions include: (1) the research credit; (2) the work opportunity and welfare-to-work tax credits; (3) Brownfields remediation costs expensing; (4) bonus depreciation for Gulf Opportunity Zone property; (5) 15-year straight-line cost recovery for qualified leasehold improvements and qualified restaurant property; and (6) corporate donations of used computers.

With the estate tax scheduled to be fully phased out in 2010 and then fully restored in 2011, estate planners and their clients need clarification. As proposed, this bill would have exempted estates under $10 million for married couples, with a 15 percent rate on estates between $10 and $25 million, and a 30 percent rate on the excess. Please see AICPA comments on estate tax reform proposals.

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