Kirkland Alert Kirkland & Ellis LLP

Temporary Repeal of the Federal Estate and Generation-Skipping Taxes for 2010

Based on a law passed in 2001, the federal estate tax and generation-skipping tax (GST) were repealed and the gift tax rate was decreased from 45% to 35% for 2010. Unfortunately, these changes are only temporary. Unless Congress changes the law, the gift, estate and GST tax laws that were in effect back in 2001 will be reinstated on January 1, 2011, at higher rates and reduced exemptions than existed in 2009. Congress may act to reinstate the taxes in 2010 retroactive to January 1, 2010, but no one knows what Congress will do.