Mitt Romney, in an effort to garner support from farmers in the Midwest, promised to abolish the estate tax earlier this week during a campaign in Iowa. As our New Jersey readers may know, the Bush-era tax cuts are set to expire at the end of the year, and there has been a bit of a scramble to take advantage of the unusually high exemption amount, which is currently at $5.2 million. In 2013, the exemption amount is set to drop to $1 million.
As we have previously discussed, the year of 2010 has been somewhat unusual in that the federal estate tax disappeared completely under legislation that was enacted earlier this decade and was never modified by Congress. While some have wondered if Congress might step in at the last moment and retroactively apply the tax to 2010, the odds of that happening look to be quite slim. However, as we look forward to 2011, we are forced to recognize the return of the federal estate tax.