Bill Overview
Title: To amend the Internal Revenue Code of 1986 to allow a deduction for investment advisory expenses of certain funeral and cemetery trusts during suspension of miscellaneous itemized deductions, and for other purposes.
Description: This bill allows a tax deduction for the investment advisory expenses of certain funeral trusts and cemetery perpetual care funds during the period in which the allowance of miscellaneous itemized deductions is suspended (i.e., 2018 through 2025). The bill also revises provisions relating to distributions by cemetery perpetual funds for the care and maintenance of gravesites. The aggregate amount of such distributions may not exceed $25 (adjusted for inflation) multiplied by the aggregate number of such gravesites.
Sponsors: Rep. Sánchez, Linda T. [D-CA-38]
Target Audience
Population: People who use funeral and cemetery trust services
Estimated Size: 30000000
- The bill affects funeral and cemetery trusts, which manage funds for a large number of gravesites around the world.
- These trusts involve investment expenses, hence the impact could extend to families using these services globally.
- Funeral services and cemetery management are necessary industries affecting a large population of funeral and cemetery service users globally.
- Relaxation of tax code provisions could attract more families to invest in these services.
Reasoning
- The primary beneficiaries of this policy would be funeral homes, cemetery trusts, and individuals who are involved in managing or using these services.
- Most typical individuals might only indirectly benefit from reduced maintenance costs if they have a family plot managed by such trusts.
- Direct financial benefits are restricted to those managing large funds or having significant investment advisories, thus potentially a smaller subset of the population could see noticeable changes in wellbeing.
- People with no direct association to cemetery funds will have no impact from this policy.
Simulated Interviews
Funeral Director (New York, NY)
Age: 62 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 7.0 years
Commonness: 5/20
Statement of Opinion:
- I believe this policy will be beneficial as it reduces overhead costs for managing cemetery funds.
- It may encourage more people to invest in pre-need funeral arrangements knowing costs may be lowered.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 5 |
Investment Advisor (Houston, TX)
Age: 45 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 3/20
Statement of Opinion:
- This policy is good for my business as it incentivizes retaining and possibly increasing advisory services for these funds.
- It's a win-win. They save on taxes, and I retain clients.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 5 |
| Year 5 | 6 | 4 |
| Year 10 | 5 | 3 |
| Year 20 | 4 | 3 |
Retired (Los Angeles, CA)
Age: 75 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- I'm glad to hear that taxes might be reduced for those managing our family plot.
- It gives peace of mind knowing costs might not rise as quickly.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 4 |
| Year 10 | 5 | 3 |
| Year 20 | 4 | 3 |
Software Engineer (Chicago, IL)
Age: 33 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 10/20
Statement of Opinion:
- This policy doesn't impact me directly, but I can see how it might benefit those managing cemetery trusts.
- I doubt I'll notice a difference personally.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Manager of Cemetery Operations (Atlanta, GA)
Age: 58 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 4/20
Statement of Opinion:
- Additional tax deductions will improve our financial stability and operational capacity.
- It might allow us to focus more on enhancing services rather than cutting costs.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 4 | 4 |
Financial Analyst specializing in trusts (Detroit, MI)
Age: 40 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 8.0 years
Commonness: 4/20
Statement of Opinion:
- Relaxing tax restrictions is beneficial for economic activity in the trust management sector.
- Could potentially streamline and make services more appealing.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 5 |
| Year 20 | 6 | 5 |
Nurse (Miami, FL)
Age: 29 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 5/20
Statement of Opinion:
- I'm hopeful lower costs on maintaining the trust will reflect positively on my family's expenses.
- This gives us a chance to reinvest or save the extra funds.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 6 | 5 |
| Year 10 | 5 | 4 |
| Year 20 | 5 | 3 |
Historian (Phoenix, AZ)
Age: 55 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 15.0 years
Commonness: 3/20
Statement of Opinion:
- This policy could help organizations like ours by reducing care costs for historical sites.
- Funding saved on taxes might be redirected toward our preservation efforts.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 5 | 4 |
Estate Planner (Seattle, WA)
Age: 50 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 4/20
Statement of Opinion:
- This is a positive policy change as it adds another layer to advise clients on in terms of savings.
- Higher trust engagement might result due to perceived financial benefits.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 7 | 6 |
| Year 10 | 6 | 5 |
| Year 20 | 5 | 5 |
Retired Accountant (Denver, CO)
Age: 67 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 7.0 years
Commonness: 4/20
Statement of Opinion:
- Tax breaks are always welcomed, it gives associations like ours a bit more financial flexibility.
- We can focus more on services instead of tax constraints.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 6 | 4 |
| Year 20 | 4 | 3 |
Cost Estimates
Year 1: $5000000 (Low: $3000000, High: $7000000)
Year 2: $5000000 (Low: $3000000, High: $7000000)
Year 3: $5000000 (Low: $3000000, High: $7000000)
Year 5: $5000000 (Low: $3000000, High: $7000000)
Year 10: $0 (Low: $0, High: $0)
Year 100: $0 (Low: $0, High: $0)
Key Considerations
- The bill affects a specific period: 2018-2025, aligning with the suspension of itemized deductions.
- The precise revenue impact depends on the total investment advisory costs claimed during this period.
- The effect on families through potential reductions in costs should be monitored for social equity concerns.