When New York Yankees owner George Steinbrenner died in July, there was no estate tax -- meaning his heirs saved potentially millions of dollars in taxes on his estate that Forbes valued at $1.15 billion.
While it looked like the timing of Steinbrenner's death might have helped his family out significantly, not so fast. Not only is the estate tax back for 2011 – although at a lower rate -- but Congress has approved making it retroactive for 2010. But families have a choice.
Heirs now have the option to pay estate taxes under the newly-adopted rules – a more favorable 35 percent and $5 million exclusion (compared with 2009’s 45 percent and $3.5 million exclusion) or pay no estate tax, but potentially face a greater tax when they sell the assets they inherited.
CCH explains the new estate tax rules in detail here.