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Estate Tax: Throw Momma From the Train


Estate tax repeal brings out the ghoul in everyone.

The morbid jokes are all over the Internet today. Basically, if you're thinking of doing your heirs a favor, 2010 would be a good time to expire.

Or as lawyers are already joking, what was referred to as the "Throw Momma From the Train" tax is now being called "Throw Momma From the Train ... Now!"

The upcoming expiration of the estate tax, set to be repealed for one year as of Jan. 1, prompted Rep. Richard E. Neal, who heads the House subcommittee on taxation, to propose: "If you are at the checkout counter, you might want to expedite things."

Democrats vow to resurrect the tax as soon as Congress returns in 2010 and make it retroactive to Jan. 1, rendering the whole situation moot, notes the New York Times. Still, the ambiguity of the situation has sent people flocking to estate planners and tax attorneys.

If you die in the next two weeks with an estate valued at $3.5 million or more, it will be taxed at the rate of 45%. After Jan. 1, the tax will be eliminated entirely. In 2011, it's restored at a rate of 55% on estates of $1 million or more -- basically the same place it was at before the 2001 Republican-led change instituted by President George W. Bush.

If things go unchanged, hit harder will be the little guy, as the repeal of the tax in 2010 is replaced by a 15% capital gains tax on any inherited property that's later sold.
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