CHICAGO — Born on the Fourth of July, George Steinbrenner left the world stage with a great sense of timing.
Because died in 2010, his wealth avoids the federal estate tax, likely saving his heirs enough money to field an entire team of Alex Rodriguezes.
The billionaire New York Yankees owner’s death Tuesday came during an unplanned year-long gap in the estate tax, the first since the tax was enacted in 1916.
Disputes in Congress have stalled efforts to replace the tax, which expired in 2009. That deprives the government of billions of dollars in annual revenue but represents an unexpected bonanza for those who inherit wealth.
“If you’re super-wealthy, it’s a good year to die,” said Jack Nuckolls, an attorney and estate planner with the accounting firm BDO Seidman.
The death of Steinbrenner, 80, highlights a quirky tax situation that has drawn much scrutiny among the moneyed but little on Main Street. Only those with estates of more than $3.5 million had to pay under the old law.
Without knowing the exact details of Steinbrenner’s holdings and estate plan, it’s impossible to say how much money will be saved. But estate planners and tax experts say it’s likely that the estate benefited hugely by the timing of his death.
A glance at some numbers suggests roughly how it may work.
Forbes magazine has estimated Steinbrenner’s estate at $1.1 billion. The federal estate tax in 2009 was 45 percent, with the $3.5 million per-person exemption. If he had died last year, his estate could thus have faced federal taxes of almost $500 million, depending on how the estate was structured.
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