“How long do I have?” James Pierson asked, trying to maintain eye contact with the man behind the desk.
“Three months, eleven days, seven hours and forty-three minutes,” David Barnett said.
“Well, it’s now the afternoon of August 19, 2010,” Barnett said. “We’re advising people not to wait until the very last day. December 31 is a time when there can be a certain amount of New Year’s Eve chaos at hospitals, and that could put the death certificate over until next year, or at least muddy the waters if there’s a question that ends up in court. So, getting it done in 2010, if you’re being prudent, means getting it done before December 31, or three months, eleven days, seven hours and forty-three minutes from now.”
Pierson swallowed. He found the phrase “getting it done” off-putting. Finally, he said, “I don’t suppose there’s a chance that this could be reversed.”
“Well, in theory there’s always a chance,” Barnett said. “The Democrats could come back after recess and announce that they’ve changed their minds, and, despite everything they’ve said in the nine years since 2001, they’re going to make the repeal of the inheritance tax permanent, but I don’t think it would be wise to count on that happening.”
“So it’s now or never is what you’re saying?” Pierson said.
“Well, it’s this year or never. Look, under the provisions of the original law, the exemption has been raised and the rates lowered every year for the past nine years. It would have been shortsighted to die in order to take advantage of any of those tax reductions, because this year the tax is gone altogether. But the law still has its sunset provision: It fades away on December 31, 2010, unless it’s renewed. So, given the Democratic majorities in both houses and the current deficit, it’s likely that starting January 1, 2011, the estate tax will be the same as it was before the rates started coming down. From a tax liability standpoint, there is no alternative to taking advantage of this window of opportunity.”
“Look, Jim,” Barnett said, “Why are you in the business you’re in?”
“Because the company had enormous paper losses that saved me a bundle in taxes and the only thing it actually owned was shares in some airliners that we depreciated the hell out of before we fobbed them off on some bush airline in Central America.”