California Estate Planning Blog by Kevin Staker

March 7, 2010

New House Ways and Means Chair at Least Talking about the Estate Tax

Filed under: Kevin Staker — Kevin Staker @ 1:57 pm
Tags: ,

There is a bit of talk in the House of Representatives about dealing with the Estate Tax. Sander Levin has taken over supposedly temporarily for Charlie Rangel as chair of the powerful House Ways and Means Committee. Ways and Means is the tax committee of the House.

An article in Businessweek states that Levin wants to take up the issue of the estate tax.   The committee may turn to addressing the lapsed federal estate tax first, he said.

The article talks about how the tax expired Dec. 31.  This also triggered a limit of  $1.3 million in the “step up” in income tax basis when a person dies.   Otherwise something called “carryover basis,” applies, the basis is otherwise unchanged at death.

This capital gains tax rule is only in force for 2010.

Hand in hand with that rule, unless Congress acts, the estate tax is scheduled to be reinstated in 2011 with a 55 percent rate applicable to bequeathed assets in excess of $1 million.

The House in December backed a 45 percent tax rate on estates that exceed $3.5 million in value for individuals or $7 million for a married couple. Opposing a return of the 55 percent rate in 2011, Senators Jon Kyl, an Arizona Republican, and Senator Blanche Lincoln, an Arkansas Democrat, are pushing an alternative 35 percent tax that exempts the first $5 million of an individual’s estate from tax, or $10 million per couple.

“I think the main point is we have to act,” Levin said in the article. “I think this interval is not helpful; people need to be able to plan.”

This is all well in good.  However, it takes two to tango.  It will be interesting to see if Levin actually pushes the estate tax change and gets the House to pass a bill.  However, getting the Senate to agree is a wholly different matter.

We shall see.

By Kevin Staker


1 Comment »

  1. Hey dips**t – credibility goes out the window when you lead off with the wrong name. Carl is a Senator – Sander is a Representative.

    Comment by Bob — March 7, 2010 @ 9:57 pm | Reply

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