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Gay Couples Face Higher Estate Taxes


MARRIAGE COUPLE DOMESTIC PARTNERS X390 (GETTY) | ADVOCATE.COM

Some wealthy gay couples will pay an average of $3.3 million more in federal estate taxes this year upon the death of a spouse than their married heterosexual counterparts, a new study finds.

If the estate tax penalty remains in effect, affected gay and lesbian couples will be subject to a total of $237 million in additional taxes in 2009 — and more than $3.5 billion in added taxes over the decade by 2011, according to a study by the University ot California, Los Angeles, School of Law’s Williams Institute.

Currently, taxpayers with estates valued at less than $3.5 million are exempted from federal estate taxes. The tax is scheduled to be repealed in 2010 but will resume in 2011 with a $1 million exemption.

Because gay relationships are not recognized by the federal government under the 1996 Defense of Marriage Act, taxpayers in same-sex relationships who transfer their assets to a surviving spouse are not exempt from the estate tax. Other tax protections that allow married heterosexual couples to transfer a business to their children — even those who are not legal descendants of the surviving spouse — are not offered to gays and lesbians.

"Even in 2010, when the estate tax is currently slated to be repealed, federal law allows different-sex married couples to shelter an additional $3 million in capital gains when a partner dies," said Michael D. Steinberger, the study’s author. "Regardless of your views about this tax, it is a costly implication of legal discrimination against gay and lesbian couples."

The report, funded by Merrill Lynch Global Wealth Management, is available here.

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Reader Comments
  • Name: Seth
    Date posted: 11/30/2009 3:44:04 PM
    Hometown: Denver

    Comment:

    I could care less about getting a windfall of some kind. My concern is for couples who own businesses that they want to pass on to a partner. The current estate tax exemption is only $3.5 million. There are a lot of LGBT businesses out there that have that much in assets, but may not have the liquidity to pay off the estate tax without selling part or all of the business. DOMA needs to be repealed, but so does the estate tax. Otherwise we'll be in the same boat 10 years from now when property values double again. LGBT business owners need to get involved in this fight (EstateTaxTruth.org).

  • Name: Disgusted American
    Date posted: 11/25/2009 9:07:47 AM
    Hometown: Deptford NJ

    Comment:

    I couldn't agree more....I really Hate this country sometimes myself......it's NOT the country I thought I lived in growing up. The words Liberty & Justice for ALL mean NOTHING to me (they are a LIE,empty meaningless words to make (a)merica sound better then it actually is ) If I could afford too, and IF I get some kind of windfall $$$ - Im so outa' here!

  • Name: Calvin
    Date posted: 11/25/2009 4:19:16 AM
    Hometown: Chicago

    Comment:

    What I'm more pissed about is why the Advocate always stereotypes gay men as 20/30 something year old white men. My partner and I aren't under 50. And, although he's white, and a top, Bob and I are just as sexy as the Advocate's models.

  • Name: Mark
    Date posted: 11/24/2009 9:03:29 PM
    Hometown: Wappingers Falls

    Comment:

    We are legally married in five states in the US! Why do we permit the federal government not to accept our legal civil marriages? Isn't it time to storm the federal government buildings and demand as taxpayers an immediate repeal of DOMA, and for us to sue sue sue every branch of our federal government until we have full citizenry? After November when the radical religious right Republicans take over Congress again it will be too late!

  • Name: Ben
    Date posted: 11/24/2009 5:12:00 PM
    Hometown: NY

    Comment:

    Sure it's not fair, but I wouldn't say it's one of the BIGGEST reasons DOMA needs to be repealed. Doesn't the article say that you are exempt unless you're a multimillionaire? That sure as hell ain't gonna be my situation anytime soon. The average gay person needs access to federal benefits like social security, or immigration rights for foreign partners.

  • Name: rick
    Date posted: 11/24/2009 2:55:21 PM
    Hometown: Middletown

    Comment:

    Some one should sue to make the straights pay for this............this will make them give us our rights. I $%*# hate this country sometimes.

  • Name: Jack
    Date posted: 11/24/2009 2:48:30 PM
    Hometown: MA

    Comment:

    who is this cute couple pictured in all the "couple" articles here? First they were reading the newspaper in bed, now they're out of bed having some coffee....

  • Name: Ken
    Date posted: 11/24/2009 2:43:45 PM
    Hometown: Malden, Mass.

    Comment:

    This is one of the biggest reasons that we need DOMA repealed or struck down by the courts.



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