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The Tax Prophet Newsletter   Issue #87 July , 2010

REDUCE TAXES!
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In This Issue:
Introduction
Estate Tax
Steinbrenner
George Steinbrenner and Estate Tax Repeal

Part 1 of 2

Introduction

Legendary New York Yankees owner, George Steinbrenner, died on July 13, 2010, leaving an estate worth approximately $1.1 billion, according to Forbes.

Because there is no estate tax this year, Steinbrenner's family may save approximately $500 million in taxes.

How did this happen?

Estate Tax
In 2001, Congress decided to increase the estate tax exemption over the next 8 years, to a maximum of $3.5 million a person in 2009.

In 2010, the estate tax was repealed, but in 2011, the exemption reverts to 2001 levels ($1.0 million a person). Thus, a huge windfall for billionaires in 2010 could become a disaster for estates worth more than $1.0 million in 2011.

President Obama has proposed retaining the estate tax exemption at $3.5 million a person, but Congress refuses to act.


Steinbrenner
Steinbrenner joins billionaires Walter Shorenstein of San Francisco and Houston's Dan Daniels whose estates will escape estate taxes because they died in 2010.

Steinbrenner hedged his bets against a retroactive change: According to his Will, if the law remains unchanged, the 2010 law will apply; otherwise the bulk of his assets will be transferred in trust for his wife's benefit (called a "Q-TIP" trust), which will postpone any estate tax until her death.

[End of Part 1]



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All contents copyright © 2010 Robert L. Sommers, attorney-at-law. All rights reserved. This newsletter provides information of a general nature for educational purposes only and is not intended to be legal or tax advice. This information has not been updated to reflect subsequent changes in the law, if any. Your particular facts and circumstances, and changes in the law, must be considered when applying U.S. tax law. You should always consult with a competent tax professional licensed in your state with respect to your particular situation. The Tax Prophet ® is a registered trademark of Robert L. Sommers.