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It is 2010…and there is still no Estate Tax…?

Posted by sitlanilaw on January 18, 2010

Congress still has not decided what to do with the estate tax.  Since January 1st, 2010 there has been no federal estate tax.  Because of this fact if one dies during this year their estate would not be subject to the federal estate tax but could be subject to an applicable state estate tax.

Unfortunately this fact did not help some individuals who passed away towards the end of 2009 with taxable estates.  The article below is likely just one example of how Congressional inaction regarding the Estate Tax had a impact on a real couple.

By SUSAN EDELMAN

If Fritz Lohman had only known, he would have waited another 13 hours to kick the bucket.

Lohman, 87, a SoHo real-estate magnate who pioneered the exhibition of gay art, died at home at about 11 a.m. on New Year’s Eve after a long illness.

If he had instead passed away after midnight Jan.1, his partner of 48 years could have avoided paying at least $3 million in estate taxes — thanks to Congress letting that levy lapse for 2010.

“He would probably say, ‘Why didn’t they tell me? I could have waited another day,’ ” said Charles Leslie, 76, Lohman’s business and life partner — and the sole beneficiary to his $10 million estate.

“It’s so utterly ludicrous,” Leslie said. “You think you’ve done everything right, taken every precaution, and then by some congressional fiat your life turns upside down.”

“What a difference a day makes — literally,” added Leslie’s estate lawyer, Erica Bell.

Bell and others are shocked that Congress failed by the end of 2009 to extend the “death tax” in 2010 for the richest Americans. The rate is 45 percent of assets beyond the first $3.5 million.

Under current law, the estate tax is gone for one year, but will be reinstated — and raised — in 2011 for beneficiaries of more than $1 million.

“That means, if you have a choice and someone is probably going to die soon, it would be better this year than next,” Bell said. “The joke is, ‘Throw momma from the train.’ ”

She added, “This is not good public policy. There’s something really wrong with a tax law that suggests when it’s good to die.”

But that dilemma tormented another New York family whose wealthy mother was terminally ill in December.

“The family could have put her on aggressive, artificial life support, with tubes and medical devices, until January 1, thereby saving $3 million in federal estate taxes,” a source said. “The family chose the kinder path — letting her die naturally and peacefully.” She didn’t make it to New Year’s Day.

Leslie said his tax bills may force him to sell some of the SoHo commercial properties he and Lohman bought years ago, investments that made them a fortune. The debonair Lohman also ran a high-end interior decorating business.

The couple is best-known for the Leslie/Lohman Gay Art Foundation they founded in 1990 and today runs a Wooster Street gallery featuring erotic works by Andy Warhol, Robert Maplethorpe and others.

The bon vivants traveled the world, but Lohman became too sick about seven years ago with diabetes, lung ailments, and arthritis. For the last two years, he was confined to his bed at the couple’s country home in Maryland, where full-time nursing aides cared for him. Leslie spent weekends with him.

Leslie is stoic about the irony of the timing of Lohman’s death.

“You can’t second guess things like that. We do not happen to life — life happens to us.”

Read more: http://www.nypost.com/p/news/local/manhattan/dying_hrs_too_soon_cost_mil_in_taxes_BrrG4ZRdNiP8cWI46Cr2gJ#ixzz0d0C9Mr8X

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