When the owner of a construction company dies, the value of the company is added to the owner’s estate and is taxed after exemptions. The estate tax, also known as the “death tax,” places a significant burden on future generations of family business owners, as well as their employees, customers and suppliers.
Small, family-owned construction companies are particularly hard hit by the death tax burden because the value of these businesses is not in liquid assets.
Family-owned businesses are the backbone of our economy and give Americans a sense of pride and accomplishment. In the construction industry, they provide valuable jobs and play an integral role in building communities. ABC believes these businesses are worth preserving for the next generation.
Former President George W. Bush signed into law a temporary repeal of the estate tax as part of the administration’s $1.3 trillion tax relief package, the Economic Growth and Tax Relief Reconciliation Act of 2001. The estate tax was repealed on Dec. 31, 2009 for one year.
On Dec. 17, 2010, President Obama signed into law the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (H.R. 4853), which establishes a 35 percent rate for the estate, gift, and generation skipping transfer and a $5 million (per person) and $10 million (per couple) exemption, for two years through 2012. If Congress had not acted during the 111th Congress, the death tax would have returned at its highest taxable rate of 55 percent and a $1 million exemption in 2011.