2010 Death Repost

[JG EA]

People haven't sufficiently thought it through, that to die in 2010 will be hard for tax planners and tax preparers. They are still dying! And I can't understand the new rules and this has come up several times this tax season already.

I know that basis starts with the decedent's basis. (Somewhere I read it was even the lessor of FMV or decedent's basis). And I know that executors can increase the basis of inherited assets up to 1.3 million - I am assuming this means increasing it up to the FMV within the 1.3 million.

But what about when someone's mom dies and there is not really an executor. Does someone get to increase the basis of assets inherited?

Does anyone know or are we just confident that Congress will clarify this for us?

[taxea]

Is anyone confident in anything that Congress does? Last I heard they are delaying any changes until later.
I just tell my clients that the laws are slated to be reinstated before the end of the year and we just have to wait and see what is included and what is changed.

[JG EA]

Thanks for responding. I guess I'll do that also. But if things stay the way they are outlined now do we know what to tell people what could happen? Does anyone get to increase the basis of assets inherited?

[taxea]

The proposal is that they reinstate the law as it existed in 2009 and possibly raise the limit to 5 million.
If they don''t the law reverts back to, I think it was 2003, the limit back to 1.5 million and the basis does not step-up but is the basis of the deceased at time of death.
Lets hope they get this taken care of before anyone has to meet a deadline for filing a decedent's return.
Oh and the estate tax is 45%.

[Rick889]

Somehow, I won't be surprised if Congress does nothing at all on this issue. Supposedly, the Senate Jobs Bill will include tax extenders on provisions that expired on 12/31/2009, but Senator Reid was quoted as saying that the estate tax would not be addressed at this time.

I know that the AICPA sent a letter to Congress last month to request prompt action. (So much for that....)