The U.S. House of Representatives this week passed a bill to provide gift tax certainty to individuals who make gifts to 501(c)(4) social welfare organizations, 501(c)(5) labor unions, and 501(c)(6) trade associations. In a related move, the House also passed a bill to repeal the federal estate tax (H.R. 1105, the "Death Tax Repeal Act").
Recently, the House of Representatives passed, with broad bipartisan support, the Fair Treatment for All Gifts Act and the Death Tax Repeal Act as reported by The National Law Review in an article titled "Gift Tax Certainty at Last? re: H.R. 1104."
Lawmakers have grown increasingly wary about how the gift and estate taxes operate to cause strain on estates of farmers, small business owners and others. This is especially a concern given President Obama's new proposals for an increased capital gains tax and for eliminating the step-up basis for capital gains on death.
The gift tax act would exempt from the gift tax any gifts to social welfare organizations, trade associations and labor unions. This is an extension of the IRS policy that already exempts gifts to social welfare organizations.
The Death Tax Repeal Act will do just what it says.
Of course, neither act is currently law. They both must still pass the Senate and avoid a Presidential veto. However, this is the first step to making these acts law.