Senate Makes No Proposed Changes to Estate Tax in Extension Bill
Senate Democrats removed any mention of the estate tax in a Bill that is currently headed to the floor. This propsed Bill will now extend the 2001 and 2003 “Bush” tax cuts for families earning $250,000 or less.
An earlier version of the Bill would have included a maximum estate tax rate of 45% while dropping the exclusion level to $3.5 million. With the new changes to the Bill, the maximum rate will be 55% with only a $1 million exclusion amount.
This new Bill would set the top rates for dividends and capital gains at 20% (plus the Medicare Surtax of 3.8% if applicable); reinstate the phaseout of personal exemptions and certain itemized deductions for higher income households; and extend certain credits such as the education credit, child tax credit and earned income credit for another year.
The Section 179 expensing limits would be set $250,000 for 2013 and probably most important, it would provide for another one-year “patch” to the alternative minimum tax for 2012.
As with any legislation started in the Senate these days, it is mostly for political posturing since any chance of the Bill passing the House is a remote as a 70% high in the Corn Belt these days.
Paul Neiffer, CPA
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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