Wealth Law Blog : Oregon Asset Protection Lawyers & Attorneys : Samuels Yoelin Kantor Seymour & Spinrad Law Firm : OR Estate Planning, Fiduciary Litigation

On January 20, 2010, the U.S. Senate took an unusual procedural step in placing HR 4154, the “Permanent Estate Tax Relief for Families, Farmers, and Small Businesses Bill of 2009” directly on the Senate calendar.  In taking this action, the Senate is in the position to completely bypass the Senate Finance Committee, which is the main tax-writing committee in the Senate. As previously reported by my law partner, Jeff Cheyne, the estate tax expired on December 31, 2009 after the Senate failed to act to approve legislation that would have extended the estate tax. 

HR 4154 was passed by the House of Representatives on December 3, 2009 by a vote of 225-to-200. The legislation would permanently extend the current exemption for estates up to $3.5 million per individual and $7 million for married couples and set a maximum rate of 45 percent on estates above this threshold. If passed by the Senate, the legislation would, in effect, retroactively restore the estate tax effective as of January 1, 2010.

I welcome your comments and questions.

• Email This
• Print
• Comments
• Trackbacks

On October 22^nd, a bill to permanently extend the federal estate tax for 2010 and beyond was introduced by a bipartisan group of Congressional Representatives. All four Representatives are also members of the House Ways and Means Committee – the tax-writing committee in the House. The bill would rescind 2010’s scheduled repeal of the estate tax. In addition, over the next ten years, the bill would increase the federal estate exemption amount and reduce the top estate tax rate as indicated in the table set forth below:

After 2019, the $5 million exemption amount would be indexed for inflation. While the introduction of such legislation is often the last time it sees the light of day, the fact that a bipartisan group (two Democrats and two Republicans) introduced the legislation, combined with their common membership on the Ways and Means Committee, may give the bill some traction. Ultimately, Ways and Means Chairman Charlie Rangel will be instrumental in deciding the nature of any legislation that moves out of the committee. Stay tuned!

I welcome your comments and questions!

• Email This
• Print
• Comments
• Trackbacks

Caution! The estate tax has a hole in it. Not to worry – a bit of legislative spackle is on the way. 

The estate tax (with its current $3.5 million exemption) is just a few months away from expiring – albeit for one year. Then, if Congress fails to act, the estate tax will reappear in 2011 with a $1 million exemption. This odd scenario exists because of the 10-year expiration of the 2001 tax bill passed early in the Bush Administration.

A recent article in the publication The Hill quotes experts and Congressional staffers saying that Congress will enact a one-year “patch” which will extend through 2010 the current $3.5 million estate tax exemption and tax rate of 45 percent. The congressional staff members indicate that because Congress is busy dealing with healthcare reform, a long-term decision for the estate tax will have to wait until 2010.

Both the Obama administration and Senate Finance Chairman Max Baucus have proposed making the $3.5 exemption and 45 percent top rate permanent. However, Republicans and some conservative Democrats have suggested a $5 million exemption and a top rate of 35 percent. With such splits present not only between the parties but also with the Democratic majority, a one-year “spackle” approach might lead to the scenario described in the blog article by my co-blogger and law partner, Ted Simpson. Under this scenario, election-year gridlock and inaction by Congress could lead to the return of the $1 million exemption in 2011. Spackle may have its limits.

I welcome your comments and questions.

• Email This
• Print
• Comments
• Trackbacks