Q. Isn’t there a special estate tax exemption for family-owned businesses? My accountant isn’t so sure. J.J., Walla Walla, Wash.
A. Not anymore. The $1.3 million exemption for a “qualified family-owned business” (QFOB) expired for decedents dying after 2003. It was repealed by the Tax Act of 2001. Among other requirements, this special exemption was available only if the business interest comprised at least 50% of the business owner’s estate and he or she was a material participant in the activity.
Tip: Other estate tax plan changes may be in the works, but reinstating the QFOB break hasn’t been put on the table.