Sanders estate tax proposal would hit wealthy harder

via online.wsj.com

Under the estate tax plan proposed by Sens. Bernie Sanders (I-R.I.), Tom Harkin (D-Iowa), Sheldon Whitehouse (D-R.I.) and Sherrod Brown (D-Ohio), the federal estate tax exemption would be $3.5 million for an individual, or as much as $7 million for a couple, with a tax rate of 45%. But estates with taxable assets between $10 million and $50 million would pay a 50% rate, and estates valued above $50 million would pay 55%. A further 10% surtax would apply to assets above $500 million.

In a nod to farmers, the bill would allow them to reduce the value of farmland by $3 million for estate-tax purposes, an increase over the current reduction of $1 million. It would also allow farmers and other landowners more generous estate-tax treatment of conservation easements by increasing the maximum exclusion to $2 million.

The changes would be retroactive to Jan. 1 of this year.

Sen. Chuck Grassley (R-Iowa), the highest-ranking Republican on the Senate Finance Committee, said "I welcome the other side's finally putting a proposal on the table."

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Three senators call for billionaire estate surtax

via forbes.com

In a new twist on the political stalemate over the future of the now lapsed estate tax, three of the Senate's most liberal members are calling for a 10% estate "billionaire's surtax" which would raise the levy on their estates to 65%. The tax would apply to estates above $500 million, which Sens. Bernard Sanders (I-Vt.), Tom Harkin (D-Iowa) and Sheldon Whitehouse (D-R.I.) say would allow each couple to pass $1 billion on to heirs without facing the surtax.

Sanders, Harkin and Whitehouse say that under their new counterproposal, 99.7% of families would pay no estate tax. They would exempt $3.5 million per estate ($7 million per couple) from any estate tax and levy a rate of 45% above that, the same as in 2009. Moreover, family farms would be allowed to exclude an additional $3 million in value per estate. But the liberals would also add higher rates that didn't exist last year. The value of estates between $10 million and $50 million would be taxed at 50%, while assets up to $500 million would face a 55% tax. Then the billionaire's surtax would kick in.

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Sen. Chuck Grassley: Tax limbo affects family businesses

via iowapolitics.com

Sen. Chuck Grassley (R-Iowa) continues to urge estate tax reform. Though some of his recent floor speech seems to be political posturing, it is hard to overlook Grassley's underlying theme - "We’re almost half a year away from a tax policy that a super majority of Senators say they don’t support. Yet, we’re stuck. This time-sensitive issue has taken a back seat to everything else."

Posted via web from The Modern Planner

Confusion over estate tax keeps advisers busy

via nytimes.com

The disappearance of the federal estate tax this year has created confusion and frustration among the wealthy, even among those who stand to benefit from it. And this has sent them in droves to amend documents that they may have to change again next year.

While there were rumblings at the beginning of the year that Congress might reinstate the estate tax and make it retroactive to Jan. 1, it has made no progress on the issue. The death of Dan Duncan (with an estimated net worth of $9 billion, makes a retroactive tax unlikely. As one commentator has stated “Now we’re way beyond that consideration. This single family could outspend the I.R.S. in litigating this.”

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Tips to help prepare for the return of the federal estate tax

via forbes.com

The prospect of a $1,000,000 exemption means many more families need to plan for the federal estate tax. There are several simple steps you can take to help preserve your assets and your family upon the return of the federal estate tax. Among these steps: reviewing the ownership of life insurance policies, properly titling assets, maximizing annual gifts, funding college savings plans and paying tuition and medical expenses.

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Charities and other non-profits feeling a pinch from estate tax repeal?

via consumerismcommentary.com

This is a very interesting suggestion. The commentator has opined that some charities and other non-profit organizations may feel a side-effect from this year’s estate tax repeal.

"Charitable giving is often a part of estate planning, and one goal of estate planning is to reduce tax liability. Charity has the benefit of being a good deed and sheltering wealth from taxes. If there are no estate taxes to avoid this year, there will certainly be estate planners who decide to pass all income to heirs rather than distributing wealth to needy organizations."

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Legacy for one billionaire: death, but no taxes

via dealbook.blogs.nytimes.com

A Texas pipeline tycoon who died two months ago may become the first American billionaire allowed to pass his fortune to his children and grandchildren tax-free.

Dan L. Duncan, a soft-spoken farm boy who started with $10,000 and two propane trucks, and built a network of natural gas processing plants and pipelines that made him the richest person in Houston, died in late March of a brain hemorrhage at 77.

Had his life ended three months earlier, Mr. Duncan’s riches — Forbes magazine estimated his worth at $9 billion, ranking him as the 74th wealthiest in the world — would have been subject to a federal tax of at least 45 percent. If he had lived past Jan. 1, 2011, the rate would be even higher — 55 percent.

Instead, because Congress allowed the tax to lapse for one year and gave all estates a free pass in 2010, Mr. Duncan’s four children and four grandchildren stand to collect billions that in any other year would have gone to the Treasury.

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Grassley urges Reid to act on the estate tax

via thehill.com

Sen. Chuck Grassley (R-Iowa) on Wednesday urged Senate Majority Leader Harry Reid (D-Nev.) to act on making changes to estate tax law before it reverts back to pre-2001 levels in 2011. Sens. Jon Kyl (R-Ariz.) and Blanche Lincoln (D-Ark.) have hatched a bipartisan plan that would create a permanent 35 percent tax on estates worth more than $5 million. But without Reid backing the proposal, Grassley said the Senate Finance Committee is unlikely to bring the bill forward.

Lawmakers were supposed to be close to a deal on the tax a few weeks ago, but that agreement apparently fell apart. During those negotiations, Kyl said there was some disagreement on how to pay for the bill. However, today, Grassley said offsets were no longer an issue, but did not say what offsets were being used to pay for the bill.

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