From: J056600@LMSC5.IS.LMSC.LOCKHEED.COM
Subject: Re: HR 4848 Raises Inheritance Taxes by Lowering 600K cap to 200K
Organization: Lockheed Missiles & Space Company, Inc.
Date: Fri, 9 Oct 92 22:06:16 GMT

In <1992Oct9.205458.27887@crd.ge.com>, Woody Ligon writes:

>In article <1992Oct6.130343.12831@cbnewsi.cb.att.com>, ca@cbnewsi.cb.att.com (c
>>
>>
>>  A bill currently before the house, HR 4848, would raise inheritance
>> taxes by lowering the federal tax free cap from the current $600,000 to
>> $200,000.  This $200,000 figure would mean that all assets over that amount
>> would be taxed at the rate of 31%.  All assets passed to heirs, including
>>the value of real estate, life insurance policies, cars, cash etc. count again
>> the $200,000 figure.  It is estimated that this would affect close to 40%
>> of all U.S. families, unless some additional estate planning is done to work
>> around this.  There is some talk that additional work on the bill might
>> include a lowering of the 10K tax free gifting policy currently is place.
>> (This information is a paraphrase from a CNBC report).
>>
>>  Of course, the plan is to begin the actual voting process on this bill
>>next year, when the liberals will have a president who would most likely sign
>>it.  In reality, there are probably a whole slew of new tax bills being lined
>>up in Congress in preparation for Clinton's arrival.  I'm sure that they media
>> won't be providing much coverage on this stuff, other than the standard "taxe
>> only on the rich" line that the Clinton campaign is touting.
>>
>>  I would say that we should call or write our Congress person on this,
>> but its probably a waste of time.  This should be a boom for accountants and
>> lawyers in the estate planning business, and a major headache for people who
>> will now have to be very creative to avoid having the government basically
>> seize a good chunk of their assets when they die.


>I checked with my "congress critter" and the above is painfully correct.

>For what its worth, the sponsor is Waxman.

>Some years back before the limit was raised to the current 600K, it was
>absolutely common for family farms to be liquidated in order to pay the
>inheritance tax.  Most small farms operate on  a shoestring and can't possibly
> come up with cash to pay inheritance tax. Farm land is on average $2K / A.
>That means you only have to own 100 A (a very  small farm) to be at a $200K
> limit.   For example, using the above numbers and a 31% rate on a 200A
>farm would mean that  a farmer's children would have to come up with 31K in
>inheritance taxes.  For most 200 acre farms that would be at least 1 years
>net income!  What a nice present on the death of your parent!

And if you live in an area with very high housing prices, the value of one
modest home more than wipes out the entire $200,000...not to mention land.  Do
you know what a 200 acre farm would be worth in California's Santa Clara
Valley?

I called Norm Mineta's office (my Congresscritter) and I was assured that Mr.
Mineta was strongly opposed to HR 4848.  Of course, even if he is a liberal
Democrat, he's no fool.  He realizes that voting for something like this, which
will impact all homeowners in his district, wouldn't help him politically in
the future.

May I assume that Waxman is from a state with low real estate values?


Tim Irvin   j056600@lmsc5.is.lmsc.lockheed.com
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