PHOTOGRAPH: A.P. CHRIS O’MEARA
George Michael Steinbrenner III, owner of the New York Yankees for more than thirty years, died Tuesday, July 13th, of a heart attack at the age of eighty. While our office is near equally divided with avid Yankees and Red Sox fans, the focus of this post is not a Yankees vs. Red Sox debate, but rather a Steinbrenner Estate vs. the Federal Government…and it seems as though the Steinbrenner Estate has come out ahead.
Mr. Steinbrenner’s 2010 death highlights the unique tax situation that is occurring only this year. His estate is positioned to take advantage of the one year “repeal” of the federal estate tax, meaning it stands to save millions of dollars in federal estate taxes. This one year repeal in 2010, the first of its kind since the federal estate tax was enacted in 1916, was set in place in 2001. In that year, Congress announced that the federal estate tax would expire at the end of 2009. Many tax professionals and estate planners anticipated that Congress would take action to avoid the repeal, but Congress did no such thing. Thus, those dying in 2010 and leaving behind massive wealth, leave estates to their beneficiaries that avoid the federal estate tax.
However, this does not mean that Steinbrenner’s estate will pass tax free; it is still subject to a temporary set up capital gains tax rules. The estate will pay taxes based on the growth of assets when they choose to sell those assets.
While tax experts speculate the savings the estate will experience, it is difficult to accurately determine how much the estate will save without knowing all of Steinbrenner’s assets and the intricacies of his estate plan. However, it can certainly be cogitated that Mr. Steinbrenner, ranked #341 on Forbes 200 Richest Americans 2009, has left an estate behind him that will benefit greatly from the avoidance of the federal estate tax.
See #341 George Steinbrenner – The Forbes 400 Richest Americans 2009, Forbes.com, Sept. 30, 2009. See also Ronald Blum, Yankees Owner George Steinbrenner Dies at 80, Associated Press, July 13, 2010.