As quickly as Estate Tax Repeal faded off the tax reform radar a few months ago, it came flying back into view about a week ago. On September 27, the GOP “Big Six” coalition, derived of members of the House Ways and Means Committee, the Senate Finance Committee, and the White House, released its Tax Reform Framework. The ever-diligent and incredibly impressive tax resource, the Tax Foundation, released a copy of the Big Six’s actual Framework, and it can be viewed here.
The Framework proposes a moderate decrease in Individual rates, and a significant decrease in Corporate rates in order to spur corporate and job growth. A one-time repatriation tax on offshore earnings is also proposed, which will further help the growth model on which the Framework is based.
However, at the end of the linked-to document above, the Framework inconspicuously proposes to repeal the Estate and Generation Skipping Transfer Taxes without any more detail than is mentioned here. Presumably, the Gift Tax will remain in place so as to deter income shifting. However, the Framework’s proposals beg the question; what will happen to the step-up in basis under Internal Revenue Code Section 1014? Could it be possible that the Estate and GST Taxes are repealed AND the step-up remains in place? Because of the obvious windfall, this author thinks not, but it will be interesting to see how this Framework progresses through the legislative process.
If you have any questions regarding your estate plan, your taxes, or any real estate or business transactions, please do not hesitate to reach out to our office for a consultation: (772) 234-5500, firstname.lastname@example.org.