President Obama wants to back out of the deal he made with Congress in 2012 for permanent estate tax law changes made at that time. Obama wants to go back to to the estate tax exemption levels and rates present in 2009. So his budget proposal includes additional revenue assuming those changes. He is using this to support for his call for increased federal budget spending. These proposal include among others:
Restoring the estate, gift, and generation-skipping transfer (GST) tax parameters in effect in 2009. As noted above, this proposal has been on the President’s radar for quite some time now. In 2009, the top tax rate was 45%. The exemption amounts were $3.5 million for estate and GST taxes, and $1 million for gift taxes, with no indexing for inflation. Portability of the deceased spouse’s unused estate and gift tax exemptions would remain available. Additionally, prior donors would not have to worry about a clawback for estate and gift taxes incurred by reason of the exemption’s decrease.
Eliminating the stepped-up basis at death and treating transfers of appreciated property as sales. Under this new proposal, the donor or deceased owner of an appreciated asset would realize a capital gain at the time the asset is gifted or bequeathed to another. The gain would be taxable income to the donor or the deceased’s estate. There are several exclusions, deductions, and other rules which would be implemented along with this proposal.
Modifying the annual gift tax exclusion.The proposal would eliminate the present interest requirement for §2503(b) annual exclusion gifts. However, there would be an annual limit of $50,000 (indexed for inflation) per donor on certain types of transfers that would qualify for the annual gift tax exclusion, including most transfers in trust.
Read about this at Bloomberg BNA Estate Tax Blog at Bloomberg Estate tax Blog
William Wombacher, your Central Illinois Certified Elder Law Attorney (CELA) and Social Security Disability Specialist. I’ll help you! http://www.wombacherlaw.com
Serving Peoria, East Peoria, Peoria Heights, Pekin, Dunlap, Chillicothe, Morton, Washington, Metamora, Canton, Galesburg, Lacon, Henry, Bloomington, Normal and surrounding cites and counties of Peoria, Tazewell, Woodford, Fulton and Knox Counties in Central Illinois.