Executors getting underway with estate tax planning should be aware of time limits on opting out of the estate tax, Bloomberg reports. The Internal Revenue Service will be giving executors for the estates of 2010 decedents until November 15 to opt out.
Estate lawyers have been unclear on when they'd need to file the return for opting out, according to the news source. If an estate owner happened to pass in 2010, their estate executor could either pay the estate tax or skip it, the news outlet reports.
An estate planning advisor would best be able to help decide whether to pay the estate tax, or not, as there are significant advantages to each choice. Deciding to pay the estate tax results in assets passed on with stepped-up value. In other words, the assets, such as stocks, carry their value at the time of the owner's death, according to the Bloomberg report.
In December of last year, Congress extended the federal estate tax retroactively to January of 2010. The tax hadn't been in effect for much of the year until Obama signed H.R. 4853, the Middle Class Tax Relief Act of 2010, into law on December 17.
The estate tax has a $5 million exemption. Its top rate is 35 percent, though this rate may change given the political battle surrounding the tax.
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