The House of Representatives today passed bills that would (1) make permanent a provision to allow individual taxpayers to elect to deduct state and local sales taxes and (2) repeal the federal estate tax.
The bills passed by the House are:
H.R. 622 (which passed the House, 272 to 152) would make permanent the ability to elect to take an itemized deduction for state and local general sales taxes in lieu of the itemized deduction for state and local income taxes.
A version of this provision was made part of the Code on a temporary basis in 2004 and has been the subject of a number of extensions since. Most recently, the provision was made applicable to taxable years beginning before January 1, 2015, as part of the Tax Increase Prevention Act of 2014.
The Death Tax Repeal Act of 2015 was passed by the House with a 240-176 vote. The bill would:
The lifetime exemption would remain at $5 million (as adjusted for inflation for years after 2011).
The bill would not change the current rules for determining tax basis of property received from a decedent or by gift; thus, the basis of property acquired from a decedent’s estate generally would continue to be stepped-up.
The U.S. Senate’s plans regarding these bills are unclear at this time.
The Obama Administration this week released Statements of Administrative Policy stating that the administration “strongly opposes” both bills.
On April 15, 2015, the House also passed, by a voice vote, the following other tax bills:
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