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ARTICLE · 19 JUNE 2001

2001 Tax Legislation

McDermott Will & Schulte
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Kim Baptiste, Susan Frunzi, Howard Sharfstein and William Zabel

The "Economic Growth and Tax Relief Reconciliation Act of 2001" was signed into law by President Bush on June 7, 2001. The new law provides for the gradual reduction of marginal federal income tax rates and the repeal of the federal estate and generation-skipping taxes by 2010, as well as other changes. The most significant provisions are summarized below. It should be noted that the true cost of the tax bill is hidden by a variety of provisions that postpone most of the benefits for five years or more and cause all of the tax cuts to expire after 2010.

Estate And Generation-Skipping Tax

  • Repeal
    • - Both the estate tax and the generation-skipping tax are repealed in 2010, but only for that year. As long as the repeal remains in effect, the current step-up in basis rules at death will be replaced with carry-over basis rules, discussed below.
  • Unified Credit

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