The KDDK Advantage
- August/September 2008
Estate
Taxes: What the Near Future May Hold
Even though economic times
are tough right now, the estate tax is one area where
Americans are getting some relief.
Just seven years ago the
government allowed individuals only a $675,000 exemption
from the estate tax while the tax rate was topping out
as high as 55 percent. This year the allowable exemption
is $2 million, and that amount is scheduled to increase
to $3.5 million in 2009. For both 2008 and 2009, the top
tax rate is 45 percent.
The estate tax is scheduled
to be repealed in 2010 but it appears certain that this
repeal will not be permanent — or even happen — considering
the size of the current budget deficit.
Many Republicans support
the one-year repeal in hopes that it will lead to a permanent
estate tax repeal. But unless that happens, 2011 will
bring the reinstatement of the estate tax with an exemption
limit back down to $1 million and the top estate tax rate
back up to 55 percent, if new legislation isn't enacted
before then.
What many are wondering
now is what to expect once the new president takes office
in January 2009. Here are the two presidential candidates’
positions on estate taxes:
Senator McCain is proposing
a $5 million exemption per person with a maximum 15 percent
tax rate. Senator Obama proposes a $3.5 million exemption
and a 45 percent maximum tax rate.
Either proposal would be
better than the guidelines Americans have been placed
under since 2001 and prior years. But due to the fact
that the Democrats are almost certain to control Congress
after the election — regardless of who wins the presidential
race — the estate tax exemption amount is likely to be
closer to Senator Obama’s proposal than to Senator McCain’s.
Regardless of your
wealth level or of current estate tax exemption conditions,
it is important to have an estate plan that will best
provide for children and grandchildren, special needs
family members or the future of a family business. If
you would like to review your current estate plan or discuss
a new plan, contact Mark Samila at 812-423-3183 or msamila@kddk.com.
The next KDDK ADVANTAGE
will take a look at the presidential candidates’ positions
on other key tax factors.
Supreme
Court Reverses Run of Pro-Employer Decisions >
September 3rd in Jasper: Topics
of Construction >>
Attorney Notes >>>
|
