Estate Tax Repeal - Revisited
The clock is ticking for Congress to show a backbone and put in place a permanent solution to the estate tax. Until then, tax planning for individuals is a mess of “what ifs” and looking for an oracle to determine which year we will die in. The latest attempt to clean up the mess created by the Economic Growth & Tax Relief Reconciliation Act of 2001 is HR 3170, currently pending in Committee in the House of Representatives.
HR 3170 would continue to increase the estate tax exemption in smaller increments from the $3 million mark in 2009 up to $4.75 million in 2014. The rate of tax would be linked to the capital gains rate, 15% until 2010 and then 20%. The deduction for state death taxes paid would be eliminated in 2010. And in an interesting move, the Executor of the first spouse’s estate could “give” any unused estate tax exemption to the surviving spouse. This would have an interesting impact on families that for some reason would prefer to not equalize estate values for tax planning purposes.
Who knows how far this Bill will get. Hopefully some meaningful resolution on the estate tax is not far off, although it could easily go unresolved until after the next presidential election.
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Index Tags: estate planning, taxes
