News Letter 18 - July 2001

Federal Estate Tax Law Modified for Dates of Death from 2002 through 2010

The Restoring Earnings to Lift Individuals and Empower Families Act of 2001 was passed by congress and signed by the President.  This bill changes the tax rates and unified credit starting in 2002.  From 2005 through 2009 the state death tax credit will be replaced with a deduction for state death taxes.  Thre rate for the GST tax also changes.  Also the deductin for Closely-Held Jamily Business Interests is reduced after a few years.  Release 66 of Inter-Est has the new tables and should work correctly until Congress changes the law again.

State Death Tax Deduction

At present Inter-Est has no provision for interrelated state death tax deductions.   We plan to add a feature similar to our current feature for interrelated state death tax credits based upon payments entered for state interest computations.  If you have any suggestions to deal with the problems of interrelated state death tax deductions, please share them with us.  It is anticipated that some states will modify their death tax laws to allow for the lace of a state death tax credit between 2004 and 2010.  We will watch developments and try to stay current.

IRS Site License

The site license with the IRS National Office was finally completed.  This site license covers all IRS employees for the next three years.  We will endeavor to make Inter-Est more useful to the IRS during the  life of this site license.

Offer to IRS Employees

The IRS National Office has a valid site license for Inter-Est.  If you are an employee of the IRS and want to use Inter-Est 3.00 at home, we will send you a CD-R with the program and manual on it for $10.00.  This will allow you to use Inter-Est at home to practice or work on your cases.  If approved, you can also use the CD-R to update your office computer.

The New Format

Since last fall, we have been shipping Inter-Est on a CD-R instead of using the 3 1/2" floppies we have used in the past.  So far we have had no problems.   We have found that if you copy files directly from the CD to your hard drive the files will be marked read only and you must change this attribute before you can use them in full.   This is not a problem with files created by the install program.

Current Inflation Rates

The inflation rate factors we have inserted into Inter-Est to date are:

        1999         101.67%
        2000         103.41%
        2001         106.83%

While the new law makes the inflation rate adjustment less important, you still need to keep the inflation rate adjustments current.

Federal Interest Rate Change

Remember to keep you interest tables current.  The last few federal rate changes are:

        1/1/2000                 8%
        4/1/2000                 9%
        4/1/2001                 8%
        7/1/2001                 7%

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