Maybe 2010 Isn't the Best Year to Die

For years, financial advisers have been joking that if you have to die, 2010 was the year to choose. This was because of the way the Bush era estate tax rules were structured. If the U.S. Senate doesn't pass a new estate tax bill, this tax disappears on Jan. 1. But it's not all good news, because the tax will reappear in 2011 with higher rates and lower exclusions.
Under the law that takes effect Jan. 1, taxpayers will face capital gains taxes on inherited property. The tax will be calculated on the original cost of the property to the person who has died. This could be extraordinarily complicated. It may not be so easy finding out what your grandfather paid for the property sixty years ago.
It is likely that the Senate will pass a one-year extension of the current law, with a retroactive date to Jan. 1, 2010, buying time to fix the situation. But that will almost certainly result in a rash of lawsuits that could make inheriting property in 2010 really complicated.