Want to know about an interesting new Federal Estate Tax bill that might get traction in Congress and how you can track it on line? Read on.
A new federal estate tax bill was introduced in the House Ways and Means Committee on October 22, 2009. This bill, known as HR 3905, is called the Estate Tax Relief Act of 2009. While the fate of the federal estate tax is up in the air, this bill might actually stand a chance of getting out of committee as a compromise bill before the end of the year.
It is different than some of the other House and Senate bills. It would slightly raise the exempt amount for next year but will provide for increases thereafter in the exempt estate and also provides for phased reductions in the rate of the tax.
Unlike some bills, it does not address the idea of a husband or wife getting a carry-over also knownas portability of the first spouses exemption.
A review of the bill’s specifics:
The bill will repeal the lapse of the Federal Estate Tax as of January 1, 2010.
It would establish a $3,650,000 exemption equivalent in 2010 (more than the current $3.5 million).
The bill then gradually increases the federal exemption equivalent to $5,000,000 by 2019 and would adjust for inflation thereafter.
This bill also contains reductions in the top estate tax rates over time with continued decreases to 35% by the 2019.
Bottom line? This bill appears to address some of the concerns of both parties and may be a politically viable compromise. If passed and then passed in a similar form by the Senate, it would still require many families to do careful estate tax planning before the death of the first spouse to avoid the tax.
We will continue to keep you posted. And, you can read the bill and track its progress here. Federal Estate Tax News on HB 3905