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Business estate tax break is long gone

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in Small Business Tax

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 This tax break, which was known as the “qualified ­family-owned business interest” (QFOBI) deduction, was repealed back in 2004.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.

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