The US Treasury Department has proposed new rules aimed at preventing taxpayers from understating the fair market value of their assets for purposes of the estate or ‘death’ tax. Treasury Assistant Secretary for Tax Policy Mark Mazur recently said that wealthy taxpayers often use “aggressive tax planning tactics to artificially lower the taxable value of their transferred assets. Treasury’s action will significantly reduce the ability of these taxpayers and their estates to use such techniques solely for the purpose of lowering their estate and gift taxes.”
Though this comes across as Treasury closing loopholes for the rich, the death tax actually falls most heavily on small businesses, including family-owned aggregates companies. “These businesses are the engine of economic growth, but the federal estate and gift taxes can lead families to sell businesses when an owner dies. Even before death, many business owners are forced to adopt estate-planning strategies that are costly, cumbersome and time consuming,” said Michele Stanley, NSSGA director of government affairs.
The estate tax is the only federal tax that is levied entirely on investment income, making it one of the most harmful components of the federal tax system and potentially adding a fourth layer of taxes on the same income. Currently the estate tax applies to transfers of assets by individuals in excess of US$5.45 million and by married couples in excess of US$10.9 million. Stanley said that NSSGA supports reduction or elimination of this tax as a critical element of tax relief for the aggregates industry.
Adapted from press release by Rebecca Bowden
Read the article online at: https://www.worldcement.com/the-americas/08082016/new-rules-proposed-for-estate-tax-56/