Clinton vs. Trump: Comparing Their Estate Tax Policies

Monday night's debate between Hillary Clinton and Donald Trump showcased just a handful of the extreme policy differences between the two candidates.  Of course, as estate planners, we are obviously keeping an eye on the candidates' positions as it pertains to taxes, especially the estate tax.  Here is the latest information we could find on their positions on the estate (death) tax, per the Tax Foundation, an independent tax policy research foundation and the candidates' web sites.

Hillary Clinton (Democrat):

Calls for the return of 2009 estate tax parameters, lowering the exemption rate from $5.45 million per individual to $3.5 million per individual ($7 million per married couple), while raising the estate tax rate.  It would impose a 50 percent rate to estates over $10 million a person ($20 million per married couple), a 55 percent rate that starts at $50 million a person ($100 million per married couple), and the top rate of 65 percent, which would affect only those with assets exceeding $500 million for a single person ($1 billion for married couple).  The new, higher brackets would likely apply to fewer than a dozen estates a year.

Clinton's plan would also repeal the step up basis at death, a rule that allows heirs to avoid paying capital gains taxes that, say, their parents or other benefactor would have owed had they sold their asset before passing away.

Donald Trump (Republican)

Trump's policy would call for a repeal of the estate tax, but would disallow stepped up basis for estates valued at more than $10 million, thereby taxing capital gains held until death (presumably to protect “small businesses and family farms”).  To prevent abuse, contributions of appreciated assets into a private charity established by the decedent or the decedent’s relatives would be disallowed.

We'll certainly be keeping an eye on this as the weeks/months unfold.

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