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Neil Callahan

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From: Sadis & Goldberg LLP Tax Group [mailto:denys@sglawyers.ccsend.com] On
Behalf Of Sadis & Goldberg LLP Tax Group
Sent: Tuesday, December 21, 2010 4:14 PM
To: ncallahan@rosemontseneca.com
Subject: Tax Alert: Tax Relief Act of 2010


Sadis & Goldberg LLP
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Sadis & Goldberg LLP

Tax Alert


Tax Relief Act of 2010


December 21, 2010


By Steven M. Etkind


As you may know, the Tax Code has been recently amended to extend what is
commonly known as the "Bush Tax Cuts" that Congress enacted in 2001 (which
by their original terms expired on December 31, 2010) will apply for another
two years. The extension means that the income tax rates will now stay at
28% and 35%. Capital Gains tax rates will now stay at 15% and qualified
dividends will continue to be taxed at 15%. The Alternative Minimum Tax
exemption amount has been increased which will lower the number of taxpayers
subject to this tax.


There are a number of tax breaks for businesses and individuals, such as the
ability to make a tax free distribution of up to $100,000 from an IRA to a
charity, and faster depreciation for businesses when property is placed into
service.


Another major change is in the Federal Estate Tax law. The Federal Estate
tax exemption will now be raised to $5,000,000, and the tax rate reduced
from 55% to 35% for Federal Estate taxes. For estates of decedents dying in
2010, they can elect to have no estate taxes apply, and to have a modified
basis carryover, instead of an estate tax imposed retroactively along with a
step-up in basis. For example, if a married couple owns $10,000,000 in
assets, with a properly planned estate, they would not be subject to any
Federal Estate taxes. However, we must remind you that New York State has a
separate estate tax imposed on estates over $1,000,000.


Prior to 2011, the Gift Tax Exemption was limited to $1,000,000. As of
January 1, 2011, the gift tax exemption is increased to $5,000,000.
Taxpayers should consider using their increased gift tax exemption over the
next two years, as the lifetime exemption may decrease in the near future.
There are a variety of estate planning techniques which can use the
increased gift tax exemption. Additionally, the Generation Skipping Tax
Exemption will be raised to $5,000,000.


If you have any questions concerning this Tax Alert or if you would like to
review your estate tax situation, please contact Steven Etkind at
212-573-8412 or at setkind@sglawyers.com.


----
U.S. Treasury Circular 230 Notice: Any U.S. federal tax advice included in
this communication is not intended or written to be used, and cannot be
used, for the purpose of avoiding U.S. federal tax penalties.

The information contained herein was prepared by Sadis & Goldberg LLP for
general informational purposes for clients and friends of Sadis & Goldberg
LLP. Its contents should not be construed as legal advice, and readers
should not act upon the information in this Tax Alert without consulting
counsel. This information is presented without any representation or
warranty as to its accuracy, completeness or timeliness. Transmission or
receipt of this information does not create an attorney-client relationship
with Sadis & Goldberg LLP. Electronic mail or other communications with
Sadis & Goldberg LLP cannot be guaranteed to be confidential and will not
create an attorney-client relationship with Sadis & Goldberg LLP.


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