By SEMA Washington, D.C., Staff
The U.S. House of Representatives passed legislation to repeal the estate tax, which impacts an estimated 5,500 families including many small-business owners. The bill would also reduce the top tax rate that is applied to gifts over $500,000 to 35%. Currently, the highest gift tax rate is 40%. A companion bill has been introduced in the Senate but no action is expected in the near term. However, the issue could become a component of comprehensive tax reform legislation that the Senate is currently seeking to address.
In 2012, Congress passed a compromise bill to lower the estate tax rate to 40% with a $5 million per person exemption (tied to inflation). If unable to permanently repeal the tax altogether, lawmakers may be willing to increase the exemption and reduce the tax rate.
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