Q. I told my heirs that my closely held business interest is 100% exempt from federal estate tax. Am I right? G.R.B., Houston
A. Sorry, no. Previously, if your closely held business interest comprised at least 50% of your estate, among certain other requirements, the estate could deduct the amount from the taxable estate, up to an annual limit. This tax break, which was known as the “qualified family-owned business interest” (QFOBI) deduction, was repealed back in 2004. Nevertheless, recent proposals in Congress would reinstate a version of the QFOBI deduction for certain businesses and farms.
Tip: Other proposed legislation would completely repeal the federal estate tax.
- Small Business Tax Deduction Strategies No matches