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WASHINGTON As of mid-December, there was an increasing likelihood that the estate tax will expire at the end of 2009 because of congressional inaction—only to be reinstated retroactively at 2009 levels for an interim period early in 2010, according to an Association for Advanced Life Underwriting official. Sarah Spear, AALU director of policy and public affairs, said the potential for the estate tax being in limbo for a short period is based on the fact that the House was due to recess Dec.18 , and the Senate is focused on passing healthcare reform legislation before it leaves for the Christmas recess. Estate tax limbo is likely to occur even though the House has already approved bare-bones legislation that permanently extends the 2009 estate tax rate at a 45% tax rate and a $3.5 million per-person exemption. The House on Dec. 3 voted 220-200 to pass H.R. 4154, the Permanent Estate Tax Relief for Families, Farmers, and Small Businesses Act of 2009 bill. However, this bill does not include the insurance industry’s priorities, which are adding reunification, portability and indexing for inflation to any permanent estate tax legislation. The estate tax issue is critical because under existing law, it goes away for 2010, but returns in 2011 with a 55% tax rate and a $1 million per-person exemption.