On April 16, the U.S. House of Representatives voted to approve a bill that would repeal the federal estate tax, which taxes an individual’s gross assets above a certain amount at a rate as high as 40 percent upon his or her death. For small business owners, including many in the HVACR industry, repealing the estate tax — or “death tax,” as it is also called — could have a significant positive impact on those who hope to pass their family businesses onto their descendants.
The U.S. has the fourth highest estate tax rate in the world, according to the Tax Foundation. Currently, the estate of a person who passes away in 2015 can be taxed up to 40 percent for assets exceeding $5.43 million — assets that include not only cash reserves but also land, property, inventory, and other assets. HR 1105, the Death Tax Repeal Act of 2015, which was introduced in February by U.S. Rep. Kevin Brady, R-Texas, would repeal that tax.