H.R.2918 - Family Business Legacy Act of 2025 (119th Congress)
Summary
H.R.2918, the Family Business Legacy Act of 2025, proposes an amendment to the Internal Revenue Code of 1986. The amendment aims to exclude bequests to certain tax-exempt organizations from the value of taxable estates. This exclusion would apply to organizations exempt under section 501(a) and described in paragraphs (4), (5), or (6) of section 501(c).
Expected Effects
If enacted, this bill would reduce the estate tax burden on individuals who bequeath assets to specific types of tax-exempt organizations. This could incentivize more charitable giving to these organizations. The change would apply to estates of decedents dying or bequests made after December 31, 2025.
Potential Benefits
- May encourage increased charitable giving to qualifying exempt organizations.
- Could provide financial relief to families transferring wealth through bequests.
- Simplifies estate tax calculations for certain bequests.
- Potentially strengthens the financial position of the exempt organizations listed in 501(c)(4), (5) and (6).
- May lead to more resources for community and social welfare organizations.
Most Benefited Areas:
Potential Disadvantages
- Could reduce federal tax revenue, potentially increasing the national debt or requiring offsetting tax increases or spending cuts.
- May disproportionately benefit wealthier individuals who are more likely to make substantial bequests.
- The definition of 'family business legacy' is not explicitly defined, potentially leading to loopholes or unintended consequences.
- Could create complexity in estate planning as individuals seek to maximize tax benefits.
- May shift the tax burden onto other taxpayers.
Most Disadvantaged Areas:
Constitutional Alignment
The bill aligns with the constitutional power of Congress to lay and collect taxes, as outlined in Article I, Section 8, Clause 1. The bill involves amending the Internal Revenue Code, which falls under Congress's authority to create laws related to taxation. There are no apparent conflicts with individual rights or freedoms guaranteed by the Constitution.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).