Just because the estate tax lapsed on January 1, 2010, does not mean that estates of decedents who die in 2010 are free of obligations to the IRS—far from it. These estates face a significant compliance burden which is exacerbated by the fact that the rules that apply in 2010 are unique—they did not apply in 2009 or before and will not apply in 2011 or after.

The IRS has promised guidance for estates in 2010 but has not announced a hard release date. Until guidance is released, estates will be stuck in a kind of limbo; although we can speculate about what the coming guidance will look like.  There are two big areas for the IRS to tackle in its forthcoming guidance: (1) administrative issues associated with 2010 informational returns, and (2) basis issues relating to the 2010 lapse of the basis step-up rules. Read this complete article at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).

For previous coverage of the estate tax conundrum in Advisor’s Journal, see Shelter Your Clients from the Estate Tax Bomb , Estate Tax Chaos (CC 10-02), Lapse of the Estate and GST Taxes in 2010? — FAQs (CC 09-55).

For in-depth analysis of the federal estate tax, see Advisors Main Library: Section 2 A—Overview Of The Federal Estate Tax And Its Calculation.

We invite your questions and comments by posting them below or by calling the Panel of Experts.

Tags: accounting, Estate tax in the United States, George Steinbrenner, Goods and Services Tax (Australia), Inheritance tax, Internal Revenue Service, Tax, United States

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