House inheritance tax phaseout differs from 'aggressive' Senate plan

[TexasTowelie]

A panel of Iowa House lawmakers moved a bill Monday that would eliminate Iowa’s inheritance tax by 2024.

House File 841 passed out of subcommittee Monday afternoon. The bill would gradually raise the size of an estate exempted from the tax: the $25,000 maximum would become $300,000 this year, then would increase to $600,000 and $1 million. The inheritance tax would be completely repealed on July 1, 2024.

Rep. Dave Jacoby, D-Coralville, proposed accelerating the process even further by immediately repealing the inheritance tax.

“I think the budget can absorb it,” he said. “Why don’t we just go ahead and eliminate this inheritance tax starting this calendar year?”

Read more: https://iowacapitaldispatch.com/2021/03/29/house-inheritance-tax-phaseout-differs-from-aggressive-senate-plan/

[sinkingfeeling]

1. So, has it been this Iowa tax that provided those stories of

families losing their farms due to 'death tax'' and not the federal one? I mean the federal estate tax exempts the first $11 million.

[TexasTowelie]

2. Most likely it isn't.

The tax is determined by whether the beneficiary is a direct descendant or ascendant. Inheriting an estate from your parents is not taxable, but inheriting an estate from a sibling is.

The maximum tax rate is 15% so I doubt that would force a beneficiary to sell the farm.

[JT45242]

3. State operating at deficits... no money for schools but this is what they are working on

A solution in search of a problem ....

A decedent’s “net estate” must be worth more than $25,000 before the inheritance tax is applicable. Those exempt from the Iowa inheritance tax include:



The decedent’s surviving spouse;
The decedent’s parents, grandparents, and some other lineal ancestors;
The decedent’s children (biological or adopted), stepchildren and grandchildren;
Certain charitable organizations;
Humane societies, public libraries, hospitals, certain municipal corporations; and
Religious reasons for up to $500


So, if you give it to your mistress, friends, etc. it can be taxed. Give it to your spouse or kids , there is already no tax.

I am ashamed that a Dem from my suburb is behind accelerating this.