How Estate Reform May Work
With President-Elect Trump along with Republicans in control of the Senate and the House, it is extremely likely that the estate tax will either be repealed or substantially curtailed. However, Democrats will still have 48 votes in the Senate and it requires the Republicans to have at least 60 votes to overrule any threat of a filibuster.
One way to get around the filibuster is to use the reconciliation rule which requires only a simple majority of the Senate. If they use this option, it does require that any provisions that are passed will sunset after 10 years. This is what happened to the repeal of the estate tax under Second President Bush. The lifetime exemption was increased from 2001 to 2009 and then was unlimited in 2010. But the provision was scheduled to revert back to the old $600,000 exemption in 2011.
Most in Congress are hoping to get a deal without having reconciliation apply, but that will require the Democrats to cooperate and we know how that has worked in the past.
We will keep you posted during the process.
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
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