UPDATED: Sources say 'fiscal cliff' deal emerging

WASHINGTON (AP) — The contours of a deal to avert the 'fiscal cliff' emerged Monday, with Democrats and Republicans agreeing to raise tax rates on couples making over $450,000 a year, increase the estate tax rate and extend unemployment benefits for one year, officials familiar with the negotiations said.

But with a midnight deadline rapidly approaching, both sides were at an impasse over how to handle automatic, across-the-board spending cuts set to take effect on Jan. 1. Democrats want to put off the cuts for one year and offset the so-called sequester with unspecified revenue.

The deal in the works would return tax rates on families making over $450,000 to 39.6 percent, the same level as under former President Bill Clinton. The agreement would also raise tax on estates worth more than $5 million from 35 percent to 40 percent. Unemployment benefits would be extended for one year.

A Republican official familiar with the plans confirmed the details described to The Associated Press.

The officials requested anonymity in order to discuss the internal negotiations.

Copyright 2012 The Associated Press.