After Charlie Rangel stepped down as chair of the House Ways and Means Committee, Sander Levin from Michigan stepped up. Next month, Levin announces, the Committee will start work on extending the Bush income-tax cuts for taxpayers with incomes of $200,000 or less ($250,000 for married couples) and restoring the estate tax retroactively.One possibility: giving executors of estates of those who die this year a choice. Either pay the restored estate tax or the capital-gains tax triggered by carryover basis.
For an estate heavy with real estate that was valued at many millions a few years ago but is now worth much less, might the capital gains alternative prove attractive?
Income tax question: Most high-income married couples achieve that status because both work. If an accountant and a lawyer who are married to each other are deemed rich when their incomes total more than $250,000, how can an accountant and a lawyer who are not married to each other be considered non-rich even though their incomes add up to, say, $350,000?
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As a first year volunteer income tax preparer I have wondered this myself. The married couple filing jointly is considered one household for tax purposes. With a combined income of $250,000 this is a wealthy household. The two unmarried people constitute two separate Heads of Households (if they have dependents) or Single (if they have no dependents). If neither Head of Household has an income of $250,000 or greater, then neither is considered wealthy for tax purposes, even if their combined income is, say, over $350,000.
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