Friday, June 23, 2006

The Wall Street Journal is reporting that "The House voted 269-156 to eliminate the estate tax for all but the wealthiest Americans, effectively ending Republican efforts to permanently repeal the tax altogether. The vote puts pressure on a handful of Democrats in the Senate to back a compromise that would tax roughly one of every 640 deaths each year. The House bill, which would be effective in 2010, would exempt the first $5 million of any estate from the tax, and tax the next $20 million at the tax rate on capital gains, currently 15%. Estates above $25 million would be taxed at twice that rate, or 30%. The thresholds would be indexed for inflation, a move made to secure backing from conservative Republicans who would have preferred full repeal.
The legislation also would allow individuals to "step up" the tax basis of inherited assets; that is, if an heir sells an asset, the capital-gains tax is calculated using the value of the asset at the time it was inherited, regardless of the original cost."

"Under current law, the estate tax would disappear for a single year in 2010 and then revert to the pre-Bush level of 55% on estates above $1 million. Compared with that, the new law would reduce federal tax receipts by about $280 billion over the next decade, according to the official scorekeeper, the congressional Joint Committee on Taxation. That is about 75% of the price tag for full repeal."

"Under the 2001 Bush tax cuts, the first $2 million of assets in an estate of a person who dies this year is exempt from the tax. The levy will hit one of every 200 people who die this year, according to the Tax Policy Center, a joint venture of the Brookings Institution and Urban Institute think tanks. If Congress fails to act, current law would lower the exemption to $1 million in 2011, which would mean that the estate tax would apply to nearly one in 50 American deaths. The House legislation would reduce the scope to just one in 641 deaths in 2011, the Center estimates."

Jeffrey Skatoff, of the law firm Clark Skatoff LLP, www.clarkskatoff.com, believes that increasing the exemptions to $5 million per person will place the estate tax burden only on the wealthiest two-tenths of one percent of American families. For other families engaging in estate planning, traditional concerns, such as trust planning, asset protection and philanthropy, will take center stage. The House legislation sets the stage for an eventual compromise with the Senate. "Removing the uncertainty as to what the future estate tax exemption rates will allow our clients to understand the estate tax ramifications of their plans, allowing better decision making and better estate plans."

Saturday, May 20, 2006

Repeal of Florida Intangible Tax

The Florida Legislature this May voted to repeal Florida's intangibles tax on assets held by Florida residents. The tax is imposed on stocks, bonds, notes, and other intangible assets. The rate of tax had been 0.05%, with an exemption of $250,000 for a single person and $500,000 for a married couple. Although the tax rate was quite low, the tax served as an irritant to retirees and investors. Governor Bush estimated that the tax affects approximately 300,000 Florida residents. The Governor has indicated he will sign the bill shortly.

Jeffrey Skatoff
www.clarkskatoff.com

Wednesday, May 18, 2005

Welcome

Greetings to all. This blog will focus on Florida legal issues, with special emphasis on estate planning, asset protection, probate, taxation, and real estate. I am a Florida lawyer with a practice in these areas.