Last Thursday, April 16, 2015, the Republican-lead House of Representatives passed a bill that would repeal the Federal Estate Tax. If signed into law, the bill would remove all taxes on money transferred from an Estate to the beneficiaries of the Estate, except for citizens living in those States that have an Estate Tax at the State level.
Currently, the Federal Estate Tax only applies to individuals who hold more than $5.43 million or $10.86 million for married couples in 2015. This is approximately 0.2 percent of the US population. Republicans, however, argue that ending the tax would alleviate the burden of family farms and businesses because some families are forced to incur loans in order to pay off the Estate tax generated when a substantial amount of land or property is passed from one generation to the next.
The Democrats believe that the Estate Tax exemption is high enough, and the Estate Tax only affects the wealthiest Americans. Additionally, the Democrats point out that the United States government would lose approximately $270 billion over the next 10 years if the tax was repealed. President Obama has indicated that he would likely veto the bill if the measure passed the Senate. Currently, there is no vote scheduled on the bill in the Senate.
The experienced attorneys at Ford + Bergner LLP have substantial experience in planning for future, in both tax planning and non-tax planning situations. Feel free to contact our office today to schedule an appointment.