U.S. Congress - H.R.436 Certain Estate Tax Relief Act of 2009
H.R.436 - Certain Estate Tax Relief Act of 2009
To amend the Internal Revenue Code of 1986 to repeal the new carryover basis rules in order to prevent tax increases and the imposition of compliance burdens on many more estates than would benefit from repeal, to retain the estate tax with a $3,500,000 exemption, and for other purposes. view all titles (2)
All Bill Titles
- Official: To amend the Internal Revenue Code of 1986 to repeal the new carryover basis rules in order to prevent tax increases and the imposition of compliance burdens on many more estates than would benefit from repeal, to retain the estate tax with a $3,500,000 exemption, and for other purposes. as introduced.
- Short: Certain Estate Tax Relief Act of 2009 as introduced.
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HR 436 defies economic and financial theory as well as common sense by not allowing discounts for lack of marketability or lack of control on certain assets owned by privately held companies. In most cases the assets for which this bill targets are held in small businesses (corporations and partnerships) that have strict provisions that limit the option for a shareholder/partner to sell and ultimately receive the proceeds. The bill essentially says that you cannot consider the lack of control, lack of a market, the difficulty, the expense, or the time frame for selling an asset in determining its value. This means that congress would like you to pay taxes on an asset that is valued in excess of its fair market value (the amount you are likely to receive when you sell the asset), assuming you even have the right to sell!
Agreed – HR 436 would eliminate the concept of “fair market value” on these assets. It would be an incredible mistake for an uninformed Congress to sneak this far-reaching and damaging legislation through.
Wrong. Intra-family use of various discount techniques aimed substantively and solely at reducing estate taxes, while represented ostensibly as having some valid business reason (particularly as applied to non-business assets) have long been a subject of abuse and a windfall to the estate planning industry (lawyers, discount appraisers, accountants, etc.). The machinations clients go through to establish and defend these techniques are usually nothing more than artificial and transparent attempts to avoid tax. By the way, these techniques have been under unsuccessful legislative attack for any years for that very reason.
Anonymous on Feb 25 is correct. The other two wish to maintain what amounts, in my opinion, to abusive practices that have been under assault for many years. This is the final nail in the coffin. Thank God it will finally kill the shady industry surrounding this nonsense so that ethical estate planners can stop losing business to shady estate planners that sell their clients a bill of goods.