Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

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Monday, April 20, 2015

Gift Tax Bill Passes House

LawLast week H.R. 1104, the bill entitled Fair Treatment for All Gifts Act, passed in the U.S. House of Representatives. If enacted, H.R. 1104 will exempt contributions to social welfare organizations, labor unions, and trade associations from the federal gift tax.

See Kevin J. Shortill, Gift Tax Certainty at Last? re: H.R. 1104, National Law Review, Apr. 17, 2015.

Special thanks to Jim Hillhouse for bringing this article to my attention.

April 20, 2015 in Gift Tax, New Legislation | Permalink | Comments (0) | TrackBack (0)

Sunday, April 19, 2015

House Bill to Protect Political Contributions from Gift Tax Passes

BillThis week the House has voted in favor of a bill that would prevent the IRS from imposing gift tax on political contributions. This bill is being framed as a preemptory protection since the IRS has not sought to  do so before. A companion Senate bill has been introduced.

Special thanks to Jim Hillhouse for bringing this article to my attention.

See Bloomberg News, Mega-Donors Freed From Gift Tax They Never Paid, Private Wealth, Apr. 17, 2015.

April 19, 2015 in Gift Tax, New Legislation | Permalink | Comments (0) | TrackBack (0)

Saturday, April 18, 2015

Congress Ends Coverage of Medicare Part B Deductible

Medicare taxMedicare beneficiaries typically purchase “Medigap” insurance, which pays for most of Medicare’s deductibles and copayments.  However, Congress recently passed legislation that will no longer allow Medigap plans to offer coverage of the Medicare Part B deductible, beginning in 2020.  Current Medigap policyholders and those buying policies before 2020 will still be eligible for the deductible coverage after that date. 

This new change is to help pay for the “doc fix” legislation that overhauls the way Medicare pays doctors and that is expected to cost $200 billion over 10 years.  The reasoning behind making Medicare beneficiaries pay the deductible themselves is that it will make them rethink the decision to go to a doctor and perhaps costing the Medicare system superfluous expenses.

See Congress Schedules End to Insurance Coverage of Medicare Part B Deductible, Elder Law Answers, Apr. 17, 2015. 

April 18, 2015 in Disability Planning - Health Care, Elder Law, Estate Planning - Generally, New Legislation | Permalink | Comments (0) | TrackBack (0)

Friday, April 17, 2015

Congressmen Make Their Case for The Repeal of Estate Tax

Seal_of_the_United_States_Congress.svgIn an opinion piece Rep. Bill Flores and Sen. John Thune argue that it is time for the abolishment of the estate tax. The two congressman assert that it is small business owners and farmers that are penalized by this tax not the handful of super wealthy that are more commonly associated with the legislation. They also argue that the tax creates a drag on the economy and would create 139,000 new jobs if repealed. However, none of their predictions will likely be tested soon as there exist significant opposition from the White House which could scuttle the bill.

See Bill Flores & John Thune, Time For The Estate Tax To Die, USA Today, Apr. 16, 2015.

Special thanks to Jim Hillhouse for bringing this article to my attention.

April 17, 2015 in Current Affairs, Estate Planning - Generally, Income Tax, New Legislation | Permalink | Comments (0) | TrackBack (0)

House of Representatives Votes to Repeal Estate Tax

The CapitolIn what could be a massive shift in tax law, the US House voted to repeal the estate tax 240-179 with significant Republican support. The change would result in the total abolishment of the tax and preserve the stepped up basis rule which is already in the code. However, this bill will face significant opposition both in the Senate and with President Obama who has already indicated he does not agree with the change. No matter what ultimately happens, this act will certainly bring out the political big guns in the foreseeable future.

See Ashlea Ebeling, House Votes 240-179 To Repeal Estate Tax, Forbes, Apr. 16, 2015.

Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.

April 17, 2015 in Current Affairs, Estate Planning - Generally, Estate Tax, Income Tax, New Legislation | Permalink | Comments (0) | TrackBack (0)

Wednesday, April 15, 2015

Ten Reasons to Repeal the Estate Tax

Tax CutAs I have previously discussed, an estate tax repeal bill is being considered by the House. Here are 10 reasons given by a proponent of the bill for ending the estate tax:

  1. The estate tax is unfair.
  2. It is unpopular.
  3. Revenue generated is extremely low.
  4. The revenue generated is decreasing.
  5. It affects family start ups and not the uber-rich.
  6. The majority of states do not have an estate tax.
  7. The U.S. estate tax rate is one the highest in the world.
  8. It negatively impacts the job market.
  9. It reduces economic growth.
  10. It negatively impacts the environment by forcing landowners to subdivide tracts.

See Ryan Ellis Top Ten Reasons The U.S. House Will Kill The Death Tax, Forbes, Apr. 14, 2015.

Special thanks to Jim Hillhouse for bringing this article to my attention.

April 15, 2015 in Estate Planning - Generally, Estate Tax, New Legislation | Permalink | Comments (0) | TrackBack (0)

Saturday, April 11, 2015

Criticisms Raised Against Double Death Tax Proposal

TaxesThe potential Estate Tax repeal is garnering much attention. Companion legislation is making its way through both the House and Senate that would repeal the estate tax. This move has raised additional criticisms of the President's proposal to increase capital gains taxes and make death a taxable event for capital gains tax purposes. Critics point to the financial burden that will be imposed on family businesses by imposing a second death tax, or double death tax, if the estate tax is not repealed and the proposed capital gains changes are passed.

See Tyler Deaton, Obama’s Double Death Tax, Roll Call, Apr. 9, 2015.

Special thanks to Jim Hillhouse for bringing this article to my attention.

April 11, 2015 in Estate Tax, New Legislation | Permalink | Comments (0) | TrackBack (0)

Friday, April 10, 2015

CBO Warns Estate Tax Repeal Will Add Billions to the Federal Deficit

EmptyAs I have previously discussed, an estate tax repeal bill passed the House Ways and Means Committee in March. As the Republican backed bill receives consideration by the House, the nonpartisan Congressional Budget Office (CBO) has expressed that if passed the estate tax repeal would create an additional $270 billion in federal debt over the next ten years.

See Rebecca Shabad, GOP Estate Tax Repeal Would Add $269B to Deficits, CBO Says, The Hill, Apr. 8, 2015. 

Special thanks to Jim Hillhouse for bringing this article to my attention.

April 10, 2015 in Estate Planning - Generally, Estate Tax, New Legislation | Permalink | Comments (0) | TrackBack (0)

New Revenue Procedure on Employer Sponsored Retirement Plans

401(k)The new Revenue Procedure 2015-28 addresses the concerns that employers who sponsor 401(k) and 403(b) plans have with using automatic enrollment and escalation, which can increase the chance of missing an employee's elective deferral. The Revenue Procedure includes a safe harbor period that extends the length of time the employer has to correct the error. However, the safe harbor period is not applicable if the employer receives notice from the employee of the mistake.

See Kenneth A. Mason, IRS Eases Correction Rules for Missed Elective Deferrals, Spencer Fane, Apr. 6, 2015.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.

April 10, 2015 in Estate Planning - Generally, New Legislation, Non-Probate Assets | Permalink | Comments (0) | TrackBack (0)

Monday, April 6, 2015

Article on Reform of Female Inheritance Rights in India

S200_rahul.sapkalRahul Suresh Sapkal (PhD Fellow, University of Hamburg) recently published an article entitled, From Mother to Daughter: Do Equal Inheritance Property Laws Reform Improve Female Labour Supply, Educational Attainments in India?, Wills, Trusts, & Estates eJournal, Vol. 11, No. 11 (2015).  Provided below is the abstract from SSRN:

In 2005, India witnessed a constitutional amendment to the Hindu Succession Act of 1956. It gave daughters equal inheritance rights as sons. However, five states in India had earlier amended the same Act in favour of daughters. Using this exogenous variation created by legislation on inheritance property rights, I exploit a difference-in-difference estimation strategy to estimate the impact of reform on female education, labour force participation and their daughter’s educational attainment. The study finds that women who were exposed to the reform experience have greater average schooling years, and average months of labour force participation. It is interesting to note that this positive effect is also observed for their daughter’s educational attainment. Results obtained from this study are consistent with the complementary and equalising effects hypothesis.

 

April 6, 2015 in Articles, Current Affairs, Estate Planning - Generally, New Legislation | Permalink | Comments (0) | TrackBack (0)