In case you were curious about the exact provisions in the Senate’s tax bill the Journal of Accountancy has a detailed article.
The bill has provisions from four of the five tax areas that were considered to be important for Congress to address during its current “lame duck” session: the estate tax, expiring tax cuts, expired tax provisions, and an alternative minimum tax (AMT) patch. The bill as introduced does not address the expanded Form 1099 reporting requirements.
The biggest news, to me, are the changes in the estate tax. Under former rules, the estate tax was eliminated in 2010, but no longer. Estate planners and financial advisors have been waiting for this bill in order to guide their clients.
HR 4853 would temporarily reinstate the estate tax, with an estate tax rate of 35% and an estate tax exemption of $5 million (adjusted for inflation after 2011). For estates of decedents dying in 2010, an election will be available either to be subject to the reinstated estate tax or to be subject to the modified carryover basis rule. Estates of decedents dying in 2010 would be given an extension to file an estate tax return until nine months after the date of enactment of HR 4853. The bill would also reinstate the generation-skipping transfer tax, and the due date for filing a return would be extended to nine months after the date of enactment of HR 4853. However, for generation-skipping transfers made during 2010, the tax rate will be zero. The bill would also restore the unified credit against gift tax for gifts made after 2010.