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Repeal of the Estate Tax in 2010: Discussion and Topics

The following presents a discussion of the ethical considerations of the repeal of the estate tax in 2010. Topics of estate tax, estate tax 2010 repeal, issues related to the estate tax 2010 repeal, and whether or not the repeal should take place are presented. This is followed by a summary and conclusions.

Estate Tax refers to the tax related to the transfer of property at death. This tax is related to everything owned or that in which a vested interest is found at the date of death to include real estate, cash, securities, trusts, insurance, annuities, and business interests. Fair market value of these items is what the tax is based on rather than what was paid for them or what the value of the items was when paid for. Gross estate refers to the total amount of these items. Once the gross estate is determined there are deductions allowed in certain circumstances (estate administration costs, mortgages and debts, and property passing to surviving spouses or qualified charities) and after this the final total is referred to at the taxable estate. The value of lifetime taxable gifts (from 1977) is then added to the taxable estate and the tax is computed accordingly and reduced by available unified credit (IRS, 2008).

At the present time, this credit amount reduces the computed tax in such a manner that only total taxable estates and lifetime gifts that are over the amount of $1,000,000 are to pay tax. Thus, current estate tax regulations affect the wealthiest (2% of Americans). Most estates are small and do not require the filing of an estate tax return. This filing of an estate tax return is required for those estates that have a combined gross assets and prior taxable gifts amount that exceeds: "$1,500,000 in 2004 - 2005; $2,000,000 in 2006 - 2008; and $3,500,000 effective for decedents dying on or after January 1, 2009" (IRS, 2008, p. 1). Rates for the annual exclusion for gifts are listed as t...

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