Wednesday, November 14, 2007

Joint Tax Cte's Report & Hearing on Federal Estate Tax

On November 14, 2007, Professor Paul L. Caron, author of the Tax Law Prof Blog, made a posting "Senate Holds Estate Tax Hearing Today", which noted that the Senate Finance Committee scheduled a hearing on "Federal Estate Tax: Uncertainty in Planning Under the Current Law", as announced on the U.S. Senate's "Hearings" webpage for Wednesday, November 14, 2007.

Two Committee Members were scheduled to present statements (click on a linked name to read that person's prepared statement):

Other witnesses were scheduled to present testimony:
  • Warren Buffett, Chairman and Chief Executive Officer of Berkshire Hathaway, Omaha, NE
  • Eugene G. Sukup, Chairman of the Board, Sukup Manufacturing Company, Sheffield, IA

In connection with the hearing, the Joint Committee on Taxation had released its background research memorandum, dated November 13, 2007, entitled, "History, Present Law, And Analysis of the Federal Wealth Transfer Tax System" (Report No. JCX-108-07, PDF, 50 pages).

This is the "Overview" of the Report:

The Committee on Finance has scheduled a public hearing for November 14, 2007, entitled “Federal Estate Tax: Uncertainty in Planning Under the Current Law.”

This document provides a history, description, and analysis of the Federal estate and gift tax rules. The overview presents data about the estate and gift tax, a brief discussion of possible economic effects of the tax, and a short summary of present law estate and gift tax rules. * * *

This is the listing of topics in the "Contents" of the Report:

I. OVERVIEW (p. 1)

A. Overview (p. 4)
B. Federal Taxes on Transfers at Death Before World War I (p. 4)
C. Estate Taxes from World War I Through World War II (p. 5)
D. Estate and Gift Taxes After World War II (p. 7)
E. The Economic Growth and Tax Relief Reconciliation Act of 2001 (p. 10)
F. Summary (p. 10)

A. In General (p. 12)
B. Exemption Equivalent Amounts and Applicable Tax Rates (p. 12)
C. Basis in Property Received (p. 14)
D. State Death Tax Credit; Deduction for State Death Taxes Paid (p. 16)
E. Selected Exclusions and Deductions (p. 17)
F. Provisions Affecting Small and Family-Owned Businesses and Farms (p. 19)
G. Generation-Skipping Transfer Tax Rules (p. 21)

A. Background Data (p. 24)
B. Comparison of Transfer Taxation in the United States and Other Countries (p. 30)
C. Economic Issues Related to Transfer Taxation (p. 35)
Any serious estate or financial planner, tax preparer, or estate/trust administrator who is involved with federal estate tax should read this report, and then retain it for future reference.

The outcome of the hearing? That will be a political decision, I'm sure.

Update: 11/14/07 @ 6 pm:

Later in the day, Professor Caron added a posting entitled "More on Today's Senate Estate Tax Hearing", which listed "Press Coverage" about the hearing. I copy his links below:Update: 11/16/07:

More articles or statements have been posted online about this hearing and its subject, including:
Update: 02/27/08:

The Law Firm Management & Marketing Systems Blog posted an update on February 27, 2008, quoting from a worthwhile summary written by
Mina N. Sirkin, Esq., of Los Angeles, California, about the status of legislation before the 110th Congress that would affect the federal estate & gift tax. See: "How Congress intends to manage your inheritance: 2008 Estate Tax Legislation on the horizon" (02/27/08).