New Tax Law Proposals Leaked

Early this week, the House Ways and Means Committee leaked its proposals for tax increases that may affect you. Some of these proposals will take effect immediately when the law passes, which could be as soon as the end of September.

Of particular import to you are the proposed changes to the estate tax, law on business valuations, and grantor trust rules.

The new proposed unified credit will change the application of the death tax to eliminate $6.58 million in tax-free gifts per person by the end of 2021. The ceiling on gifts one person can give without paying tax, during life or after death, will now be five million dollars.

The proposal as to valuation discounts affects the deemed value of passive business interests. Passive income-producing properties you own will be valued at their full market value for gift-tax and death-tax assessment purposes.

The new proposed grantor trust rules will eliminate one technique by which you could push assets out of your estate while still maintaining control over them. If you have created a trust, it would be best to reevaluate it by the end of the year under the new proposed rule to determine whether and to what extent it will be deemed included in your estate.

The Committee intends to use the tax increases to fund three trillion dollars of domestic programs.

There are many other tax-related proposals in the current bill. The complete list of proposals is posted here.