MSCI Tell House Lawmakers To Reduce Estate Tax Burden On Family Businesses
In April 2024, U.S. House Ways and Means Committee Chair Jason Smith (R-Mo.) and Tax Subcommittee Chair Mike Kelly (R-Penn.) announced the formation of ten tax teams, comprised of Republican members of the committee, to study key tax provisions from the 2017 Tax Cuts and Jobs Act (TJCA) that are set to expire in 2025 and to identify legislative solutions to protect Americans from tax increases.
Interested stakeholders had until Oct. 15, 2024 to offer guidance to the teams regarding how Congress should approach these expiring tax policies, including what provisions to keep, expand, or sunset.
As such, last week the Metals Service Center Institute signed onto a letter organized by the Family Business Estate Tax Coalition (FBETC) that urged the lawmakers to extend important protections from the federal estate tax. Historically, the FBETC has supported the full and permanent repeal of the estate tax. Absent full and permanent repeal, however, the FBETC has supported the temporary increase of estate tax exemption thresholds indexed for inflation, along with permanent lower tax rates and provisions for spousal transfer and stepped-up basis. Additionally, the FBETC supported the temporary estate tax relief in the TJCA, which doubled the estate tax exemption to approximately $11 million for tax year 2018 and indexed future increases for inflation through 2025.
As lawmakers consider options for extending or making permanent expiring provisions of the Tax Cuts and Jobs Act in 2025, the letter urged members of Congress to provide additional estate tax relief and maintain stepped-up basis, which is critically important to family-owned businesses because it can significantly reduce the potential estate tax burden that may arise when the family passes on the property to the next generation.
In general, the letter also asked lawmakers “to consider the United States’ family-owned businesses, farms, and ranches as they contemplate major tax legislation next year.”