BNA Bloomberg’s Daily Tax Report quoted Lewis J. Saret regarding the likelihood of estate tax repeal during 2015, in an article, captioned Potential for Estate Tax Repeal Grows Despite New Obama Capital Gains Proposal. The full article may be read by clicking DTR.2015.01.26.
Excerpts taken from article:
Lewis J. Saret, of the Law Office of Lewis J. Saret in Washington, pegged the probability of repeal at less than 50 percent for 2015. But the probability has increased substantially given the new congressional leadership, he said Jan. 20.
He agreed that Obama may be positioning himself for possible estate tax repeal negotiations. ‘‘I could possibly see a compromise where the proposal is enacted and the estate tax is eliminated,’’ Saret said.
The president’s proposal to tax capital gains at death bears a resemblance to the Canadian tax system, Saret said, with one major difference. Obama didn’t propose eliminating the current estate tax.
‘‘If the proposal were enacted as proposed, there would be both an estate tax and the proposed capital gains tax at death—almost certainly something that Republicans, with their consistent stance against any tax increases, would not agree to,’’ he said.
Unexpected Proposal. Until now, fighting a relaxation of the estate tax hasn’t been a priority for Obama, so the capital gains proposal came as somewhat of a surprise.
‘‘Obama has given up at least twice, in 2010 and 2012,’’ Saret said. ‘‘So clearly, prior to this, it wasn’t all that important to him.’’
In 2010, the estate tax exemption was going to go back to $1 million, and there was talk of it being fixed at $3.5 million, Saret said, but at the last minute it got bumped up to $5 million, indexed for inflation, for two years. Obama didn’t fight it.
In 2012, Republicans threw in permanently fixing the estate tax at $5 million, and Obama didn’t oppose that, he said.
If repeal happens in the near term, it is more likely to happen in 2015 than 2016, he said, when the presidential election will keep legislators from tackling controversial issues.
Reproduced with permission from Daily Tax Report 16 DTR S-12 (Jan. 26, 2015). Copyright 2015 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com.