Estate Tax Repeal Legislation

04/03/2012

On March 28, Republican Senator John Thune introduced S. 2242, know as the Death Tax Repeal Permanency Act.  The bill has 34 co-sponsors and is very similar to H.R. 1259, the Bipartisan Death Tax Repeal Permanency Act, which was introduced in the House in March 2011 and currently has 205 co-sponsors. S. 2242 would do the following:

  • Repeal the federal estate tax for good.
  • Repeal the federal generation-skipping transfer tax for good.
  • Lock in a $5 million lifetime gift tax exemption and 35% gift tax rate.

Unlike H.R. 1259, which has a handful of Democrats as co-sponsors, all of the Senate co-sponsors of S. 2242 are Republicans. In his 2013 budget proposal, President Obama once again put his support behind a $3.5 million estate tax exemption and 45% estate tax rate. Even so, in this presidential election year don't count on any changes being made to the federal estate tax laws. But remember, if nothing is done, then on January 1, 2013 the estate tax exemption will drop from $5.12 million to $1 million and the estate tax rate will jump from 35% to 55%.