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The federal estate tax, more commonly referred to as the death tax, is about to financially kill surviving family members. The death tax was repealed effective January 1, 2010. However, it is set to return on January 1, 2011 with the tax rate extending to as much as 55% of the estate.

The tax is applied to the transfer of all assets of a deceased person to there survivors heirs. According to the Internal Revenue Service, “The Estate Tax is a tax on your right to transfer property at your death. It consists of an accounting of everything you own or have certain interests in at the date of death [Refer to Form 706 (PDF)]. The fair market value of these items is used, not necessarily what you paid for them or what their values were when you acquired them. The total of all of these items is your "Gross Estate." The includible property may consist of cash and securities, real estate, insurance, trusts, annuities, business interests and other assets.”¹

The IRS demands that the death tax be collected within 9 months from the time of death. If the heirs that inherited any of the listed assets, cannot afford to pay the taxes, the IRS insists that some or all of the inheritance be sold in order to pay the death tax that is due. This includes family owned businesses and farms.

A recent Gallup Poll showed that 56% of Americans felt the death tax was one of the most important issues for Congress to address. They want Congress to prevent the death tax from become effective this coming January.

The Family Business Institute recently released a coalition letter that was signed by 40 organizations. The letter asks Congress to extend the repeal of the death tax.

If you don’t want your family to face the possibility of having to sell everything to pay for your death, you must contact your Congressman and Senator and implore them to extend the repeal the death tax. Washington must be stopped from financially destroying families who lose a loved one.

References

1. Internal Revenue Service, Estate Tax Overview,
   http://www.irs.gov/businesses/small/article/0,,id=164871,00.html.

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