Friday, December 17, 2010

Tax Relief Enacted

As announced in a host of media publications today, December 17, 2010, we have a new federal tax act, representing a political compromise and a temporary Congressional consensus -- but not a long-term solution -- on crucial pending income, estate/gift/generation-skipping, and social security tax issues (among other subjects).

For example, on "Estate of Confusion" (a Forbes Blog) in its posting today entitled "House Passes The Middle Class Tax Relief Act of 2010, H.R. 4853", Hani Sarjii highlighted the compromise, and concluded that "the reform of the estate tax is only temporary."
On December 16, 2010, the United States House of Representatives passed H.R. 4853, the Middle Class Tax Relief Act of 2010. The vote was 277 in favor and 148 against.  The bill will now go to President Obama’s desk to be signed into law.

H.R. 4853 is a compromise between President Obama and Republicans. It will extend the Bush Tax cuts and provide temporary estate tax reform: an estate tax rate of 35% and a $5 million exemption for individuals, for two years.

H.R. 4853 is going to change estate planning.  * * * Also, H.R. 4853 will not end estate tax uncertainty. * * *
C-SPAN reports that "The President is set to sign in to law the Middle Class Tax Relief Act of 2010 (H.R. 4853) later this afternoon [3:50 p.m]."  See also: Bloomberg News, House Passes Tax-Cut Extension, Sends Bill to Obama  (12/17/2010, with video).

My intention now is not to summarize the law, but to list a few resources online for a reader to explore and research initially.

Professor Paul L. Caron lists excellent links -- including a shorter summary (PDF, 3 pages) and a longer summary (PDF, 12 pages) -- regarding the new federal tax law in his posting President Obama Signs Tax Package Into Law (12/17/10) on the Tax Prof Blog.  [Update:  See also: More on the Obama-GOP Tax Bill (12/19/2010).]

For a running reference on the political developments leading to the new law, see: Thompson Reuters Tax Watch and its Archive covering the period November and December, 2010.  See also: Blog posting entitled Are We Having Fun Yet? (12/13/2010), by William (Bill) D. Pargaman, Esq., of Austin, TX, who prepared a tentative summary of the pending legislation as of December 9, 2010.

Descriptions about the underlying bill and its amendments are set forth by The Library of Congress (Thomas)See also: Open Congress, which lists news articles and blog postings related to it, and which also sets forth the text of the House-approved bill.

The U.S. Senate's Committee on Finance posted links on a webpage entitled S.A.4753: The Reid-McConnell Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010, as follows:
BNA also provides a link to that last item above -- the final text of H.R. 4853, as amended numerous times -- being the "Senate Amendment to the House Amendment to the Senate Amendment."

Update: 2010-12-20:

Congress has approved and the President quickly signed a mulibillion dollar tax cut package, the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (2010 Tax Relief Act) (H.R. 4853). The new law follows through on the framework agreed to December 6 by President Obama and GOP leaders in Congress. The 2010 Tax Relief Act extends the Bush-era individual and capital gains/dividend tax cuts for all taxpayers for two years. The bill also provides for an AMT “patch,” a one-year payroll tax cut, 100 percent bonus depreciation through 2011 and 50 percent bonus depreciation for 2012, a top federal estate tax rate of 35 percent with a $5 million exclusion, and more. * * *
This is an excellent resource, which was posted publicly (and quickly!) for professionals and the public.  I commend CCH for doing so.  It should be a timely and trustworthy summary.