Reverse Mortgage Guide

The link between reverse mortgages and estate taxes is fairly clear: Once a reverse mortgage is repaid there is a smaller estate and thus less to tax — although virtually all estates are too small to merit attention under the federal tax system.

There is, however, the “problem” of those with big estates. The current estate tax arrangement is set to expire in 2010 at which point estate taxes will then rise significantly if there is no replacement legislation.

While some are vehemently opposed to taxes on estates of any size, the political reality is that the government needs money and most people do not want to see the establishment of a hereditary patrician class — including a lot of very rich people.

A potential answer to the problem is say the co-sponsors, then the 55 percent tax rate that would otherwise apply if the law is not changed.

In effect, small businesses and farms could be passed on without tax, while the seriously rich would be compelled to underwrite the country which allowed them to gain such great wealth.

This entry was posted on Sunday, September 9th, 2007 at 9:04 am and is filed under Reverse Mortgage . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.