The December tax-law overhaul was a godsend to folks with nice-size estates.
To assemble a modest-size estate of eight hectares in Boca, one newcomer to the region, Christoph Künzli, had to sign about 80 separate purchase agreements, so fragmented was the ownership of the land.
The size of estates exempt from the estate tax are scheduled to be increased next year and several times over the next decade, with repeal of the estate tax set for 2010.
Other important provisions would raise the tax credit for children, now $500 per child, to $1,000, lower taxes for married couples, increase the size of estates exempt from taxation and repeal the estate tax entirely in 2011 and allow deduction of up to $5,000 for college tuition payments.
Other central parts of the bill also proposed by the president would lower the taxes of married couples, double the tax credit for each child to $1,000, increase the size of estates exempt from taxation and repeal the estate tax in 2011.
However, these effects would be partly offset by a roughly 40percentnt fall in the average size of estates, as a larger number of relatively smaller estates are brought into IHT.
Under the bill, the size of estates exempt from taxation, now $675,000, would be raised to $4 million by 2010.
There are also disagreements among senators over the tax rate and the size of estates that should be exempt, further clouding the bill's prospects.
Between now and then, the size of estates exempt from taxation would be gradually raised to $4 million, and the top rate, now 55percentt, would be lowered to 45percentt.
The Democratic plan he and Mr. Gephardt favored would have increased the size of estates exempt from the tax to $2 million next year, $4 million for a couple, and would eventually have increased the exemption to $2.5 million for an individual and $5 million for a couple.
An easier prediction is that you will not see Congress move forward on Obama's proposals to limit family limited partnerships, grantor retained annuity trusts or other tools now widely used to reduce the taxable size of estates.
