Two high-profile deaths put inheritance tax savings at a minimum of $4.5 billion.
July 14, 2010 — Although the families feel a personal, emotional loss, heirs of the rich have gained a fortune in tax relief. Two wealthy families, alone, have accounted for an estimated $4.5 billion in tax savings.
As part of the Bush administration’s 2001 tax cuts, 2010 was established as a year in which the estate tax, which taxed estates at a 45% rate, would not be collected. It’s scheduled to come back in a new form in 2011 at a 55% tax rate.
George Steinbrenner, owner of one of the most valuable sports teams in the world, the New York Yankees, passed away on July 13. His estate is estimated to save more than $500 million in estate taxes, a debt that may have forced the family to sell the team. Energy mogul Dan Duncan died on March 28 with an estimated worth of more than $8 billion. His death in 2010 saved his heirs an estimated $4 billion.
The federal government first enacted the estate tax in 1916, at a rate of 70%. As of 2009, estate tax was applied to any estate valued at more than $3.5 million, applying the 45% tax on any money over that amount. The Treasury Department collected more than $25 billion in estate taxes in 2008.
Will the government try to retroactively apply the estate tax?
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