Overview of H.R. 3905 - Estate Tax Relief Act of 2009

Recently Rep. Shelley Berkley (D-NV), joined by Rep. Kevin Brady (R-TX), Rep. Artur Davis (D-AL) and Rep. Devin Nunes (R-CA), introduced H.R. 3905 - the Estate Tax Relief Act of 2009. This bill provides for the following:

• A gradual increase in the federal estate tax exemption from $3,650,000 in 2010 to $5,000,000 2019; in 2020 and beyond, the exemption would be adjusted for inflation.
• A gradual decrease in the estate tax rate from 44% in 2010 down to 35% in 2019.
• A gradual phaseout of the deduction for state death taxes at 10% per year so that by 2019 the deduction would be completely eliminated.

This bill differs significantly from other estate tax bills introduced in the House and Senate in several ways:

1. It does not address portability of the federal estate tax exemption between married couples.
2. It calls for a gradual increase in the federal estate tax exemption instead of a fixed amount.
3. It does not provide for unity of the generation-skipping transfer tax exemption and gift tax exemption with the estate tax exemption.
4. It phases out the deduction for state death taxes.

With the provisions of the various estate tax bills being all over the place, don't be surprised if a simple one year patch is the end result.

• What is the Federal Estate Tax?
• Overview of Current Federal Estate Tax Laws
• What Does Portability of the Federal Estate Tax Exemption Mean?
• June 2, 2009 - Predictions About the New Federal Estate Tax Law
• Sept. 17, 2009 - One Year Patch Likely to End Estate Tax Repeal in 2010
• Oct. 22, 2009 - Update on Predictions About the New Federal Estate Tax Law
• Dec. 18, 2009 - Federal Estate Taxes Will Die on January 1!