House freezes estate tax

Nearly every grower and small business owner in America will be exempt from paying any estate tax under H.R. 4154, said Congressman Earl Pomeroy, who authored the bill. The Permanent Estate Tax Relief for Families, Farmers and Small Businesses Act of 2009 would make permanent the 2009 estate tax exemption level of $3.5 million for an individual ($7 million for a married couple) and a maximum tax rate of 45%. Additionally, the bill maintains the so-called “step-up in basis” tax rules, which protect many heirs from paying additional capital gains taxes on inherited assets.
If Congress fails to act, the estate tax is scheduled to enter one year of full repeal in 2010 followed by a return of the estate tax in 2011 with much lower exemption amount ($1 million) and a much higher maximum tax rate (55%).