New tax law has a surprise "Cinderella" ending.

Remember the old saying, "If something appears to be too good to be true, it probably isn't."?

It applies to the Economic Growth and Tax Relief Reconciliation Act of 2001 legislation recently passed by Congress and approved by President Bush. There are many provisions to study and great tax benefits, but after each one, we should say, "Maybe".

The last provision of the law is that it does not apply after December 31, 2010. In other words, at midnight on December 31, 2010, the spell will be over and - POOF!! - the "coach and horses" will become a "pumpkin and mice"! Maybe it should be renamed the Cinderella Tax Act of 2001

The repeal of the estate tax and generation skipping tax is a bad joke - it's only effective for one year! Many states have estate taxes that dovetail with the Federal estate tax. What are they supposed to do?

Congress will certainly revisit these issues and probably extend many of these provisions, but how do we make long-term plans based on a murky picture of what Congress will do in the future?

Also, many of the provisions of the law will not become effective until after President Bush is out of office. We have already had a change in controlling party for the Senate, and the House could follow in a few years.

All information provided is general in nature and intended to create awareness, not to address the specific circumstances or concerns of any individual or entity. Although we try to provide correct and timely information, we cannot guarantee the accuracy of any information or that such information will continue to be accurate in the future due to the changing nature of the tax laws. Before acting on any of the information provided here, you should consult with a professional advisor who knows all of the unique facts and circumstances pertinent to your particular situation.