There is some bad news out of the House of representatives in a proposed bill to reform the estate tax laws. Pennsylvania estate and trust lawyer David M. Frees III is monitoring many of the proposed changes in the death tax laws and recently ran across this very bad piece of proposed legislation.
According to David Frees, "This bill will keep trust and estates attorneys busy for years to come and will raise enourmous amounts of revenue for the federal government. Neither of these things is good for middle class and affluent families."
The bill, currently in the house ways and means committee contains a number of bad provisions for family business owners and for many ordinary families. For example, according to this article, the bill contains a proposed elemination of the step up in basis at death. This could mean that many families will pay capital gains tax on inherited assets.
Even worse, is that the proposed estate tax bill would eliminate minority discounts ( a means that many families have used to pass on family farms and businesses)
So, while the bill looks innocuous on the face of it (it raises the tax exempt amount to 3.5 million dollars) it in fact contains a number of provisions that will radically increase the death tax for many families.
More on this to follow. We will keep our readers informed of the various bills and the progress of these bills through the house and Senate. The short story is, that the federal estate tax looks like it is hear to stay, and that it is going to be worse, rather than better for many middle class and wealthy families.
Finally, if you are considering a family limited partnership and minority discounting as part of your estate plan, it might be the time to act before it is too late. Get the advice of legal and tax advisors soon.
David M. Frees III, Esquire
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