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Treasury proposes rules to close estate tax 'loophole'

Treasury proposes rules to close estate tax 'loophole'
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The Treasury Department has proposed rules designed to prevent taxpayers from paying less than they should in estate and gift taxes.

The proposal would curb taxpayers' ability to understate the fair market value of their assets for purposes of the taxes, Treasury Assistant Secretary for Tax Policy Mark Mazur said in a blog post Tuesday.

Mazur said that wealthy taxpayers often use "aggressive tax planning tactics to artificially lower the taxable value of their transferred assets."

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"Treasury’s action will significantly reduce the ability of these taxpayers and their estates to use such techniques solely for the purpose of lowering their estate and gift taxes," he said.

Estate and gift taxes apply to transfers of assets by individuals in excess of $5.45 million and by married couples in excess of $10.9 million. Mazur said that fewer than 10,000 estates are subject to the taxes each year.

Democrats generally support the taxes. Democratic presidential nominee Hillary ClintonHillary Diane Rodham ClintonThe Hill's 12:30 Report - Third vaccine candidate with 90% efficacy Biden won — so why did Trump's popularity hit its highest point ever? The Hill's Morning Report - Presented by the UAE Embassy in Washington, DC - Calls mount to start transition as Biden readies Cabinet picks MORE has proposed increasing the number of estates that would be subject to the tax.

Republicans have long wanted to eliminate the estate tax, which they often refer to as the "death tax." Repeal of the tax is included in both the House Republican tax reform blueprint and the tax plan from Republican presidential nominee Donald TrumpDonald John TrumpBiden team wants to understand Trump effort to 'hollow out government agencies' Trump's remaking of the judicial system Overnight Defense: Trump transgender ban 'inflicts concrete harms,' study says | China objects to US admiral's Taiwan visit MORE.

The proposal is subject to a 90-day comment period and would take effect 30 days after it is finalized.