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The amount of property that passes free of
the Federal Estate Tax will increase from $2,000,000 during 2008, to
$3,500,000 during 2009, and to an unlimited amount during 2010 when
the tax is repealed. The tax is then scheduled to return in
2011.
The tax not
only returns in 2011, it returns to the amount that existed in 2000
which
allows a $1,000,000 taxable estate to remain untaxed.
Sunset Provisions: The return
of the Federal Estate Tax in 2011 is due to a "sunset provision" in EGTRRA,
(The Economic Growth and Tax Relief Reconciliation Act of 2001), the law that created these
changes to the tax.
A sunset provision is part of a law that requires the automatic
termination of that law on a specific date.
The sunset provision that is a part of EGTRRA
was used to avoid the "Byrd Rule."
The Byrd Rule: Named
for its creator, Sen. Robert Byrd, the Byrd Rule allows the objection
of just one U.S. Senator to defeat the passage of any law that will
affect revenue for more than ten years.
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Although any such objection may be overridden
with the support of 3/5 of the Senate, it was not believed that 3/5 of the
Senate would support EGTRRA when it was proposed.
In order to avoid the Byrd Rule, a sunset provision was included that
automatically terminates the law within ten years. By ending within ten
years, EGTRRA does not affect revenue for more than ten years and its
passage could
not be overridden by just one Senator.
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Intestacy CalculatorsTM
Most of the Intestacy CalculatorTM
include a calculation of the Federal estate tax, while also calculating
the amount of the intestate estate that will be given to each heir.
You can also open the
Federal Estate Tax Calculator to see the amount of tax due this year.
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See Also:
Table of Federal estate
tax rates by year
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