On behalf of Ronald H. Kauffman, P.A. posted in Domestic Partnerships on Wednesday, October 24, 2012.

Death and taxes impact everyone, gay or straight. Recently, the issues of homosexuality, same sex marriage and divorce have been in the news, especially with the presidential debates. Whatever side of the debate you may find yourself, have you ever asked whether homosexuals should be taxed differently? When asked that way, the question sure sounds unconstitutional.

In 1963, Edie Windsor met her late-spouse, Thea Spyer, in New York City. They entered into a committed relationship, and lived together in New York. In 1993, they registered as domestic partners in New York City when it became available. In 2007, as Spyer’s health began to deteriorate, they decided to marry in Canada – which permitted gays and lesbians to marry. Two years later, Spyer died, leaving her estate to Windsor.

The unlimited marital deduction is one of the major deductions in determining a taxable estate. There is no limit to the amount of the marital deduction, so a married person can potentially eliminate estate taxes by leaving the entire estate to her surviving spouse. However, the Defense of Marriage Act, or DOMA, prohibits federal recognition of same-sex marriages. Because of the operation of DOMA, Windsor did not qualify for the unlimited marital deduction, and was required to pay $363,053 in federal estate tax on Spyer’s estate.

So, in addition to losing her spouse, and facing the prospect of living her remaining years alone, Windsor now faced a $363,053 federal tax bill that married heterosexual couples do not have to pay. In 2010, Windsor commenced a lawsuit seeking a refund of the federal estate tax levied on Spyer’s estate and a declaration that DOMA violates the Equal Protection Clause of the Fifth Amendment.

Last week in Windsor v. United States, the Second Circuit Court of Appeals found that DOMA’s section 3 does not pass constitutional muster. I understand that a petition for a writ of certiorari is already pending in the U.S. Supreme Court.

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