13k and the Estate tax exemption can be used during your life for gifts in excess of the gift exclusion. Your in-laws would be smart to start gifting a percentage of their estate to each of their heirs each year. Gifting you and your wife $52,000 this year ($13k from Mom to you, 13k from Dad to you, 13K from each to her).
You do realize how a ponzi scheme keeps going, don't you? OP, talk with a an attorney...probably can give you better advice than most here. I'm all for an estate tax, but that is a bit harsh
That is how the tax system is designed to work, people with the means can and will find ways around the rules. Just like little shops will pay taxes while GE will get a government tax rebate.
Lawyers getting paid to setup a vehicle for you to keep your parent's property. Silliness. (But necessary)
Single proprietorship, I think. I believe they're talking to lawyers and whatnot to ease the burden. That said, this is all theoretical... nothing imminent. It should be decades still, hopefully. It was just something I discussed with my fiancee (or, rather, she brought it up) and the concept of estate tax confused me. Y'all know I'm pretty liberal, and I'm all for higher revenues for the government... but this just didn't make much sense to me, so I wanted some contrarian opinions. I'm getting that, which is good. I guess if it was just $5 million cash, I would have no issue forking half of it over to the government. It's the fact that it's a business that throws me, I think.
This is why you should not be allowed to post/troll. The OP gives a perfectly reasonable/understandable objection to the estate tax, and a reasonable debate ensues. You come in and lower the discourse to kindergarten level. Please leave and let the adults talk.
Look up estate planning. Don't inherit the property, but instead have the parents stick it into a trust and then the children just get paid a salary. You still get benefits of ownership, but you don't technically own it.
Depends how you define rich, I guess. They own some businesses and lease some land, but they don't pocket much of the cash and don't live extravagantly at all. I view rich as some folks sitting in a giant mansion paid for by high profits or extreme salaries... that's not them.
If it wasn't taxed as "property" instead of cash, then there would be a huge loophole. People would just buy something with all their money before they die, you'd inherit that, and then you could sell it and get the cash value back. As far as the taxes go, just to be clear - you would not be paying it. The estate would have to pay it before it's cleared and given to you. In a general sense, we tax transfers of wealth in this country. When you make $1, it's taxed. If you then spend it, it gets taxed again. If you give it to someone (over $13k), it will be taxed again. This is no different - it's part of the transactional tax system that the country is built on.
I have no problem with this, but should the estate tax rate be higher than, say, the average income tax rate? 55% just seems absurdly high.
Fun fact--- "The necessaries of life occasion the great expense of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. A tax upon house-rents, therefore, would in general fall heaviest upon the rich; and in this sort of inequality there would not, perhaps, be anything very unreasonable. It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion" Quote by noted socialist--- Spoiler Adam Smith
I agree with that - though all of our tax rates are different for transactions. Sales taxes are different than income tax rates on wages, which are different than capital gains, etc. I do think the rate is a bit ridiculous on the inheritance tax, though.
But, I can see what he's saying. The business is a unitized cash-generating machine. You can't reasonably expect to sell half of it and still make half the income with what's left. If you lose half of it, the machine breaks and the income (and economic benefit) is lost in its entirety. Fortunately in this case there are 2 gas stations, so he can sell one to pay the tax to keep the other. Even so, you lose economies of scale. So, you don't want such a burden placed on a business. But, again, that's what incorporation is for. There's a cost to pay the lawyers and accountants, but it's much less than 55% of the estate.
