House Votes to Keep Estate Tax at Current Levels

The House of Representatives has passed a bill that would permanently keep the estate tax at levels that are in effect this year.

The approach is one that many charities have been seeking because they say it will help them appeal to donors.

The Senate has not yet voted on estate-tax legislation.

Under the current estate-tax law, heirs in 2009 can exempt $3.5-million from taxes ($7-million for couples), with amounts above that taxed at 45 percent.

In 2001 Congress passed the current estate-tax law, which gradually phases out the tax through 2009 and repeals it for 2010.

In 2011 the current law is set to expire and estate-tax levels that applied years earlier (an exemption of $1-million and a tax rate of 55 percent) will go back into effect unless Congress takes action.