In life, George Steinbrenner beat the Red Sox.
In death, he beat the IRS.
Steinbrenner's death on July 13 occurred six months after the federal estate tax expired.
Forbes magazine estimates the Yankees owner's net worth was $1.15 billion, so the timing of Steinbrenner's death could save his heirs up to $500 million in federal estate taxes.
I wish the rest of us could be so lucky.
In the USA today article, Sandra Block, talks about how congress inaction helped cause this 12 month loop hole and how congress inaction could spell trouble for many families starting in 2011.
The federal estate tax is scheduled to return with a vengeance on Jan. 1, 2011, imposing a levy of up to 55% on estates valued at more than $1 million.
That may not seem like much but as the article points out, especially in areas of high real estate value, that $1 million mark can be reached fairly easily by a lot of families.
Throw in the value of a home, pension, 401, investments, businesses, and that $1 million is easily reached.
So whats the big deal? Why are folks both for and against this?
Well, obviously taxes bring in money to the government which now desperately needs it but folks argue that the government is essentially taxing this money twice.
Once as it is earned or payed out, then once again via an estate tax.
Of course congress is working to propose higher limits and different rates but there are differing (democratic and republican) proposals, and if they can not come to terms on a compromise, then the rest of us get stuck with the new mess.