Wills, Trusts & Estates Prof Blog

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

Monday, December 31, 2012

Fiscal Cliff Estate Tax Fight

IRSAs of yesterday on December 30, 2012, the several key members of the Senate, including the Majority Leader Harry Reid, reconvened talks over the fiscal cliff. It is believed that members of the Senate are working on a small deal that involves a portion of the Bush-era tax cuts. Aides from the Hill claim that the "Democrats are likely to make concessions on the estate tax to Republicans — who loath high rates on what they've dubbed the 'death tax' — in exchange for keeping the Bush tax cuts at the president's preferred threshold of $250,000."

As I have previously discussed, several Democrats are concerned with how an increase in the estate tax might affect their constituents who are farmers and ranchers. I have discussed how a reduction in the estate tax exemption could harm farmers particularly hard because the nature of the wealth that they transfer at death. The split that this has created among the Democrats in the Senate, including Senator Max Baucus, could give Republicans the edge as they move into the final hours of the fiscal cliff debate.

See Suzy Khimm, The 'Fiscal Cliff's' Estate Tax Fight, Explained, The Washington Post, Dec. 30, 2012.

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

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Comments

How does fiscal cliff deal affect the income tax brackets for trusts and estates?

Posted by: Peter Melcher | Jan 2, 2013 9:12:48 AM

Peter- Income in excess of $11,950 now gets hammered at 39.6%. Trust and estate income is also subject to the 3.8% medicare surtax.

Posted by: brian j. cohan | Jan 5, 2013 12:21:34 PM

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