Throughout 2009, tax professionals insisted that Congress must act on the estate tax. Efforts for a compromise failed at year-end, however, so the scheduled repeal of the estate tax has now occurred. Repeal, however, is a mixed blessing. During 2010, those who die with substantial estates will transfer their assets to their heirs tax-free. However, the value of the assets in the hands of the heirs (their "basis") will be the same as the original owner's basis. If the heirs later sell those assets, the heirs will pay capital gains taxes on any gain at the rate in effect at the time of the sale. No guidance has been provided for heirs who are unable to determine the basis of the inherited assets.

In 2011, the pre-2001 law will be reinstated so that the estate tax exclusion would be $1 million and the maximum tax rate would be 55%. Before Congress adjourned for 2009, the House pased a permanent rule that would have left 2009 law intact with a $3.5 million exclusion and a maximum rate of 45%. To facilitate this change, the Senate Budget Resolution included a so-called "unfunded reserve" that would have allowed this change to be made without a "pay for." The Senate was unable to reach agreement on the terms of either a permanent or temporary estate tax rule, however, so repeal is now in effect.

Some legislators have said that Congress will act in 2010 to make 2009 law (or something slightly more generous) permanent, and that the changes would be retroactive to January 1, 2010. Other commentators believe that it would be unconstitutional to make retroactive changes to the estate tax, however, because the estate tax is driven solely on the question of the date of death.