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What to Know About the Death Tax Repeal Act of 2015

Posted on: April 21st, 2015
death tax repealLegislation to repeal the federal estate tax and the Generation Skipping Transfer (GST) tax was introduced just after the turn of the New Year. The proposed laws are part of the Death Tax Repeal Act of 2015 (H.R. 173).

The Act would completely repeal estate, GST, and gift taxes as part of Subtitle B of the Internal Revenue Code of 1986. If passed into law, it would go into effect immediately and apply to all decedents who die on or after the date the Act is passed. The same effective date would apply to generation-skipping transfers and gifts made.

As of this writing, the Act has only been introduced and has not passed the House.

Lawmakers introduced the legislation in an effort to preserve the longevity of family businesses. If the Act passes, it will help minimize the extensive planning family businesses must manage during their lifetimes to reduce their estate tax liability. Senator John Thune stated “more than 70% of family businesses do not survive to the second generation” as the law currently stands.

Although the Act would appeal the nearly century-old death tax on the federal level, a decedent’s estate might owe state estate tax depending on the state where they resided or were domiciled. Out of the states the estate planning and tax attorneys at TrustCounsel serve, here are the current estate tax requirements on the state level:
  • New York – As of 2014, the ‘estate tax cliff’ could deplete an individual’s estate if not planned for properly. On April 1, 2015, the basic exclusion amount increased to $3,125,000.
  • Florida – No estate tax.
  • North Carolina – No estate tax.
  • Tennessee – Exemption for the 2015 tax year is $5,000,000 and the estate tax is slated for full repeal in 2016.

To stay updated on tax law changes, follow our lawyers on Twitter @estateplansnc and Facebook.
 
 
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