THE NEW YORK YANKEES BOSS BENEFITS FROM A BREAK IN THE U.S. TAX CODE
July 15, 2010
Chalk up another win for George Steinbrenner: The New York Yankees owner saved his heirs a whopping $600 million by dying in 2010, says MSN Money.
How did he do it?
- The estate tax, which hits the very wealthy, lapsed this year as a quirky part of President George W. Bush's tax cuts that were signed into law in 2001.
- The 45 percent estate tax rate expired at the end of 2009, and the 55 percent rate does not go into effect until Jan. 1, 2011, leaving 2010 wide open for tax-free deaths.
- Some estimate that this year's tax hiatus could cost the U.S. Treasury Department an estimated $14.8 billion or more in 2010.
- Congress had pledged to fix the 2010 tax gap, but they could not agree to anything at the end of 2009 so Steinbrenner's heirs are left with a big zero for an estate-tax bill; that is, unless Congress includes retroactive elements to the estate tax when they do deal with it.
"Not only is the future uncertain, but the past is also. We have no idea what the law is," Ronald Aucutt, an estate tax attorney with McGuire Woods, told the Wall Street Journal.
Another expert had a different opinion.
"If you're superwealthy, it's a good year to die," Jack Nuckolls, an attorney and estate planner with the accounting firm BDO Seidman, told the Associated Press.
- Forbes estimated Steinbrenner's net worth to be $1.1 billion.
- Steinbrenner owned 55 percent of the Yankees, which includes the team, the YES Network and the new Yankee Stadium, as well as various homes and a stud farm in Ocala, Fla., according to Forbes.
- Forbes estimated that the Yankees, which he acquired in 1973 for $10 million, are worth $1.6 billion, but the team is extremely leveraged because of debt from the new stadium.
Source: Elizabeth Strott, "Tax break saves Steinbrenner heirs millions; The New York Yankees boss benefits from a break in the US tax code," MSN Money, July 13, 2010.
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