Estate Tax Filers: An Exclusive Club

The Congressional Research Service has issued a report concluding that the new estate tax regime is permanent.  They noted that:

  • The estate tax will affect less than 0.2% of decedents over the next decade
  • The estate tax is concentrated among high income taxpayers: 96% is paid by the top quintile, 93% by the top 5%, 72% by the top 1%, and 42% by the top 0.1%
  • About 0.2% of estates with half or more of their assets in businesses will be subject to the estate tax
  • About 65 farm estates (or approximately one per state) are projected to be subject to the estate tax
  • About 94 estates (about two per state) with half their assets in small business with owners who expect their heirs to continue in the business are projected to be subject to the estate tax.

Law Firms and Accountants who found a substantial part of their revenue in the taxation of estates are considering the viability of their business models in this new environment.  Of course, the complexities of the Portability rules, and State Estate Taxes will provide some work, but many firms are cutting staff and exiting the business.

Posted in The Tax Environment, WillPlan Blog.

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