In light of the recent changes to the Maryland estate tax, have there been any changes to the D.C. estate tax?
This past week, the D.C. council voted to approve an estate tax bill which brings change to the D.C. estate tax. At the present time, individuals who die in D.C. with an estate greater than $1 million are subject to D.C. estate tax. If the bill becomes law, the estate tax exemption threshold will increase from $1 million to $2 million in January 2016.
Moreover, the D.C. estate tax exemption is planned to increase to the federal amount (currently $5.34 million in 2014). This increase however won’t become effective until additional revenue becomes available to cover the cost of other tax cuts that are higher in priority than the estate tax.
The mayor now has the option to sign the bill, or he could veto it or do nothing. If the mayor signs the bill (or takes no action), then the bill will become an act (after 10 days). At that point, Congress will have a short period of time to review the act and if Congress does nothing, the act will become law. If Congress does not approve the act, a joint resolution could send it to the President to decide.
Comment: It appears that estates taxes, even state estate taxes, for most people are going the way of the dodo bird. The estate tax is now really a tax levied on estates who most would consider the true 1 percent (or less). As always, if you have questions or would like to know more about estate tax please contact Steven E. Shane at: firstname.lastname@example.org | 301.575.0313. Steve provides strategic counseling to clients in need of estate administration, charitable giving and business continuity planning while minimizing estate, gift, and generation-skipping transfer tax exposure. He offers legal guidance to clients on asset protection and the proper disposition of assets in accordance with the client’s objectives, while employing tax planning techniques such as the use of irrevocable trusts, life insurance planning, lifetime gifts and charitable trust. He is also experienced with drafting documents for business planning, the incorporation and application for exemption for Private Foundations and the administration of decedents’ estates. You can also connect with Offit Kurman via Facebook, Twitter, Google+, YouTube, and LinkedIn.