House cancels estate tax repeal, extends current tax rate

Washington Post | December 3, 2009 | Staff

[MaestroLC]

The House votes 224-199 to cancel a one-year repeal of the estate tax, set to begin next month, and instead permanently extends the current tax, with a top rate of 45 percent on estates larger than $3.5 million.

[Mr. Lucky]

You're confusing the federal income tax with the federal estate tax.

Life insurance proceeds are not treated as income in respect of a decedent so are not subject to an income tax upon receipt by an estate or beneficiary, (just as, say, proceeds of a bank account are not treated as income); however, the Internal Revenue Code (26 USC 2042) specifically provides that the value of any life insurance proceeds payable to a decedent's estate or, if owned by the decedent, payable directly to a beneficiary, is subject to estate tax.

[Mr. Lucky]

The $7 Million exemption for couples is not automatic, but would ordinarily reqire the creation of something commonly called a "credit shelter" trust or the partial disinheritance of the surviving spouse.

[bamahead]

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[Landru]

I'm shocked 'bama, SHOCKED I tell ya! LOL

Neverrrrrr saw it coming. LOL!!

[stephenjohnbanker]

Anyone here still think they live in a free country? Anyone here aware of the fact that under Obama Care, the IRS will snatch your bank account?

[floriduh voter]

Obama is talking about “pillars” again too. That’s right out of the Islamic religion. The feds are robber barons.

[floriduh voter]

Family Trusts have to be fully funded. Irrevocable Trusts. Time to see an attorney who does Wills and Trusts. Maybe trusts aren’t taxed? I haven’t seen a law office for awhile on trust issues.

[floriduh voter]

Yes, Irrevocable Trusts and all the loopholes allowed by law before they get rid of them! The feds are felons and want to rob Peter to do their social engineering and stuff their pockets too! THE FEDS ARE PARASITES.

[Red Boots]

Maybe we should use the “Personal Sob Story” tactic as laid down by the lefties, where they tell a sob story about one of their constituents who is about to be left penniless by their own innane policies. Only this time it would be to explain how this would affect Farmer Brown and his son Bob.

There is already a magazine that does this, it's called Range. It is filled with personal tales of family farm and ranch destruction at the hands of this very tax.

Every politician who claims he is for the little guy should read it.

[Red Boots]

How many family farms and family owned businesses are worth more than $7 million?

A lot of family farms and raches out west have a lot of land. It is necessary because the land is somewhat barren, so it takes a lot to support a viable cow-calf operation or farm. The land value, especially if development has taken place nearby, can easily exceed $7 million, even though the cash flow of the business never came anywhere close to that.

So when the estate tax hits, the entire operation must be liquidated to pay the tax. This one law is really why there are fewer and fewer family farms and ranches.

Who buys it: developers,massive factory farms, and Cargill.

[CORedneck]

From that stupid faggot to the small business and family farms, "up yours and I have mine and I will make sure you don't get yours (wealth)". People in Boulder are so out of touch. I been there many times and it is called "10 square miles surrounded by reality." One thing about Boulder, I see a lot of Volvo's, Jags and BMW's and well heeled type of people. When I driven my old pickup truck there, I gotten some dirty looks from people and even comments about my truck.

As I said many times before, the worst people I dislike are wealthy liberals and next is liberal corporate executives.

“In America, it’s not a sin to be rich nor is it a crime to die rich,” said Rep. Jared Polis, D-Colo. “This bill gives our nation’s wealthiest families the ability to know exactly what their obligation to the nation that fostered their wealth will be, and it is fair and it is just.”

[CutePuppy]

You're confusing the federal income tax with the federal estate tax.

Not really, but the confusion between different "classes" or codes of taxable income is precisely the reason to remove some of them from our lives... permanently!

... specifically provides that the value of any life insurance proceeds payable to a decedent's estate or, if owned by the decedent, payable directly to a beneficiary, is subject to estate tax.

Which is why anyone who has anywhere close to $3M or more in assets at stake should know or have a tax / estate / trust lawyer who understands and can explain the difference between the "insured" and the "beneficiary" and the "owner" of the policy.

I didn't not want to make my post on this thread a treatise on the topic of life insurance in tax planning. Hope that post #112 makes it clear http://www.freerepublic.com/focus/news/2399567/posts?page=112#112 :
Yes, life insurance policy generally should not be “owned” by an insured or be a part of his taxable “estate”.

[SteamShovel]

“This bill gives our nation’s wealthiest families the ability to know exactly what their obligation to the nation that fostered their wealth will be, and it is fair and it is just.”

If the nation takes a family's wealth away when the earner dies, how is that just and fair?

Does not this mean the "nation that fostered their wealth" is a lie? They become leaches, not "fosterers".

The earner earned the money, the nation did nothing other than exist. The family that would inherit was the nurturer.