Death Tax Elimination Act in the House of Representatives: Next week, the
House of Representatives will vote on the Death Tax Elimination Act (HR 8). The
act will repeal all estate, gift and generation-skipping taxes effective January
2011. The tax will be reduced annually until then. Current law allows $675,000 of
assets to pass to heirs tax-free. The act will increase the unified credit to $1.3
million for those who die after Dec. 31, 2000.
A provision in this legislation will eliminate the family-owned business exemption
created by Taxpayer Relief Act of 1997 (TRA97) that allowed $1.3 million of assets
from family-owned enterprises to be passed tax-free. The increase in unified credit
eliminates the definitions of the family-owned business exemption to provide the
relief intended by TRA97.
The act increases the number of allowable partners and shareholders in a closely
held business. Closely held businesses will be eligible to take advantage of the
current law provision allowing the death tax to be paid over a period of years.
Otherwise, the tax must be paid in full within nine months after a death.
NRCA members are urged to call their representative to ask that they vote for HR
8, the Death Tax Elimination Act. If you call the U.S. Capitol Switchboard at (202)
224-3121 and provide the name of your representative, you will be connected. Please
direct any questions to NRCA's Washington, D.C., office at (800) 388-5765 or e-mail
Craig Brightup, NRCA's associate executive director of government relations, at