For the 99.5% Act vs. American Housing & Econocmic Mobility Act
It all begins with an idea.
For the 99.5% Act
Who: Senators Sanders, Whitehouse, Gillibrand, Van Hollen, Reed, and Warren, Representative Gomez
Lower Exemption: $3.5 million estate tax and $1 million gift tax, starting in 2022
Higher Rates: 45% for $3.5-$10M, 50% for $10-$50M, 55% for $50M to $1 billion, 65% for above $1 billion, starting in 2022
Valuation Discounts: Discounts would be largely eliminated, transfers after enactment date
GRATs: Minimum 10-year term and minimum remainder of the greater of 25% of the value of assets or $500,000, applies to transfers after the enactment date
GST: Any trust that will last more than 50 years will have an inclusion ratio of 1 (i.e., would owe tax on distributions to skip persons). For existing trusts that last longer—they will have an inclusion ratio of 1 starting 50 years, applies to transfers after the enactment date
Annual Exclusion: $20,000 cumulative cap on transfers to trusts or gifts of entities with
restrictions on them (example: Crummey powers), tax year following the year of the enactment date
Grantor Trusts: Effectively reflects Obama Green Book proposal in what would be a new Section 2901 that would include assets in gross estate, applies to transfers after the enactment date
Limited Elimination of Basis Step-Up: No step-up in basis for grantor trusts that are not included in the gross estate, applies to transfers after the enactment date
American Housing and Economic Mobility Act of 2021
Who: Senators Warren, Markey, Gillabrand, Sanders, Hirono, and Merkley
Representatives Cleaver, Khanna, Garcia, Cohen, Shakowsky, Pressley, Moore, Bonamici, Lee, and Delegate Norton
Lower Exemption: $3.5 million estate tax and gift tax, will apply to 2021
Higher Rates: 55% for $0-$13M, 60% for $13-$93M, 65% for above $93 million; 10% surtax on tax owed by estates over $1 billion; will apply to 2021
GRATs: Minimum 10-year term and minimum remainder of 10% of the value of assets, applies to transfers after the enactment date
GST: Any trust that will last more than 50 years will have an inclusion ratio of 1 (i.e., would owe tax on distributions to skip persons). For existing trusts that last longer—they will have an inclusion ratio of 1 starting 50 years after the enactment date. Applies to transfers after the enactment date
Annual Exclusion: $20,000 cumulative cap on transfers to trusts or gifts of entities with restrictions on them (example: Crummey powers). Applies to tax year following the year of the enactment date.
Grantor Trusts: Effectively reflects Obama Green Book proposal in what would be a new Section 2901 that would include assets in gross estate. Applies to transfers after the enactment date.