Below is a list of relevant estate tax bills introduced in U.S. House of Representatives thus far in the 111th Congress. We expect that more estate tax legislation will come, including a comprehensive middle class tax relief bill by Sen. Max Baucus (D-MT) that is expected to include an estate tax relief provision. The estate tax will likely receive more attention during the budget process in Congress:

H.R. 436 – Rep. Earl Pomeroy (ND-at large)
The “Certain Estate Tax Relief Act of 2009”: The bill makes the current exemption of $3.5 million and the rate of 45% permanent. (Estates between $10 million and $23.5 million would be taxed at 50%.) H.R. 436 changes the current valuation rules for the transfer of “nonbusiness assets,” which would limit the use of limited family partnerships as a planning mechanism. The standard for valuing assets is the price that “any willing seller” would be willing to pay, but since “nonbusiness assets” are not publicly traded they are valued below market price. H.R. 436 would disallow the reduced valuation of such assets. The bill would also limit minority discounts by disallowing the discounting of assets transferred to an individual that does not have control over the entity the assets are transferred to.

H.R. 96 – Rep. Michael Conaway (TX-11)
Amends the Internal Revenue Code to: (1) increase to $1.85 million the maximum reduction amount for alternative valuations of farmland and other business property for estate tax purposes; and (2) restore after 2009 the estate tax deduction for family-owned business interests and increase such deduction to $2 million. Allows annual inflation adjustments to such increased amounts after 2010.

H.R. 173 – Rep. John Salazar (CO-3)
The bill excludes from an individual’s estate farmland so long as the land continues to be used for farming. To exclude such farmland from the total estate, the individual must have earned 50% of their gross income from farming in at least 3 of the 5 years from the individual’s last tax year and during 5 of the 8 years prior to the individual’s death the land must have been used for farming. If the land is subsequently sold or no longer used for farming a tax will be applied on the heirs.

H.R. 205 – Rep. Mac Thornberry (TX-13)
The “Death Tax Repeal Act”: Repeals the federal estate, gift, and generation-skipping transfer taxes.

H.R. 498 – Rep. Harry Mitchell (AZ-5)
The “Capital Gains and Estate Tax Relief Act of 2009”: Amends the Internal Revenue Code to: (1) restore the unified credit against gift tax liability; (2) provide for annual increases in the estate tax exclusion amount between 2010 and 2015 and establish a permanent exclusion amount of $5 million for 2015 and thereafter; (3) provide for an inflation adjustment to the estate tax exclusion amount after 2015; (4) reduce estate tax rate brackets; and (5) allow a surviving spouse to use the unused unified estate tax credit of a deceased spouse.

—Chris Tampio