On October 14, 2009, House Ways and Means Committee Chairman Charles Rangel (D-NY) indicated his committee was considering moving forward on estate tax reform.
Then on October 22, 2009, Mr. Rangel said he was working on 2009 legislation to make estate tax legislation permanent. These legislative options will likely be discussed at the Democrats’ next committee caucus meeting later this week.
According to Ron Aucutt, a partner at McGuire Woods LLP in McLean, Virginia, on that same 22nd day of October, members of the House Ways and Means Committee, namely Shelley Berkley (D-NV), Kevin Brady (R-TX), Artur Davis (D-AL), and Devin Nunes (R-CA) introduced H.R. 3905, called the "Estate Tax Relief Act of 2009." Mr. Aucutt stated that “Under this bill, in each of the ten years from 2010 through 2019, the estate tax applicable exclusion amount would increase by $150,000 and the top rate would decrease by 1 percent. Thus, by 2019 the exemption and rate would be $5 million and 35 percent.”
He also said that “…the deduction for state death taxes would be reduced 10 percent per year through 2019, when it would be eliminated entirely” and that “… the $5 million exemption would be indexed for inflation after 2019.” According to Mr. Aucutt, “H.R. 3905 would also abandon carryover basis and make permanent the other 2001 transfer tax changes, including the several helpful rules regarding allocation of the GST exemption.”
It appears committee members are now getting ready to discuss the estate tax in 2009, even though according to Aucutt, it is unlikely that the Democratic Caucus will ever support a bill such as H.R. 3905. (The above information was derived from the LISI Estate Planning Newsletter # 1539 on October 26, 2009).
If you have any comments or questions regarding this news flash or estate tax planning in general, please feel free to contact an attorney at our office.
-Attorney David M. Grant