Generation-skipping tax. This is an extra federal tax on transfers made from older folks to someone in their grandchildren's generation. When the estate tax is repealed in 2010, the generation-skipping tax will also disappear. Until 2010, the exemption amount will be the same as the estate tax exemption amount (shown in the table above).

Basis of inherited property. A change with far more widespread implications is the end of the "stepped-up basis" rule for inherited property. Under current law, when you inherit something, your tax basis (which is used to calculate your taxable profit when you sell something) is the market value of the property on the date of the former owner's death. So if the property's value has gone up significantly since the former owner acquired it, the basis is "stepped-up" to the date-of-death value. That means you get a big tax break when you sell, because your taxable profit is based on the date-of-death value, not the lower basis of the former owner.

That rule will end when the estate tax does, in 2010. From then on, when you inherit property, you can choose to take a stepped-up basis for only $1.3 million of it. If you inherit more than that, for the rest of the property, your basis will be the former owner's basis or the date-of-death market value, whichever is smaller. You'll have to choose which of the assets get the stepped-up basis.