Stephen J. Cannell, Tony Curtis, Jimmy Dean, Dino De Laurentiis, Blake Edwards, Lena Horne, Art Linkletter, J.D. Salinger, Erich Segal and George Steinbrenner are just a few of the famous people who died in 2010. These and other individuals who died in 2010 picked an inconvenient year from an estate tax perspective.
The year started off with no federal estate tax, but a new modified carryover basis for heirs, as set by the Economic Growth and Tax Relief Act of 2001 (P.L. 107-16). However, the Tax Relief, Unemployment Insurance Reauthorization, and Jobs Creation Act of 2010 (P.L. 111-312), signed into law on Dec. 17, 2010, changed everything. The year ended with a federal estate tax at 35 percent, a $5 million exemption, and a stepped-up basis for heirs. Estates of decedents dying in 2010 were given a choice between the old or new rules. Because the IRS was so late in finalizing forms for these estates, it granted special relief for executors and heirs.
