The Tax Relief Act of 2010 restored the federal estate tax for 2010 with a maximum tax rate of 35 percent and a per-person exemption of $5 million. It also provided an option: Estates of persons who died in 2010 could elect an estate tax rate of zero, along with a carryover basis for the assets rather than a stepped-up basis.
To make the election, the estate must file IRS Form 8939. The filing deadline is January 17, 2012.
If you are the executor or family member of a person who died in 2010 with a sizeable estate — and you have not already made or ruled out this election — contact your advisor at Bader Martin immediately to discuss your options.