The Estate / Death Tax

BTW, Liesel Pritzker is kinda cute, for a 19 year-old:



I know this isn't appropriate for the D&D. This is more Hangout material, but I'd take her over Paris Hilton.

 

I would say that a $3 million estate qualifies as "rich" to me. There is not an inheritance tax in 98% of cases, which should show you how little it actually applies.

For me, the estate tax is absolutely fair because there is a large transfer of wealth from one person to another. For the receiver, this is income and SHOULD be taxed, especially when it is large enough to trigger this tax.

Why should Paris Hilton be allowed to inherit billions and not pay tax on any of it?

 

It's not SOLELY for revenue purposes, which is what you said, you make it seem as if the estate tax loses money every year or doesn't bring in much revenue; not the case. All taxes are at least partially for revenue purposes. For a government that is 400 b in the hole, taking a 30b hit is not a good idea.

 

(this message is intended solely for TJ)

I love the estate tax...we're starting to do a lot more estate planning in my office, and it's just great! yea, estate tax!!!

 

Question:

Is the Estate/Death tax invoked before the money actually changes hands between the deceased and the heir? In other words, assuming a 1,000,000,000 inheritance, does the 1,000,000,000 go to the (in this example) sole heir and he is then required to pay tax, or is the 1,000,000,000 taxed and the remaining money then passed down to the sole heir who does not have to claim it on his taxes that year?

 

bobrek -- i could go down the hall and ask the resident expert in our office...but i believe the estate itself files a tax return and pays the taxes

 

My question would eventually resolve to the following. (I'm just throwing out numbers for example purposes). If the 1,000,000,000 is taxed first, let's assume it becomes 800,000,000 (for lack of a better number) so the sole heir gets 800 million. Now assume, that clutchfans.net has 100,000 members and I want to make them all my heirs. Instead of leaving each 10,000 (which may escape any taxation based on individual tax brackets), i could only leave 8,000.

If this is the case, then it truly appears that this is double taxation because the money is taxed before the transfer. In other words, I am taxed again as opposed to my heir(s) being taxed.

 

Double taxation is a myth. It's not the actual physical dollars that are being taxed, its the transaction itself and the value that is created.

If we just went by the physical dollars, then every single tax is double, triple, quadruple, quintuple, etc. (take it up to as many numbers as you would like) taxation.

If each physical dollar could only be taxed once, than the first time it rolled off the printing press it would be taxed once and then could never be taxed again. That's not a very good way to get revenue....

BTW, for your example, it's not you that's being taxed the first time, its the estate you're inheriting it from, just like its your estate thats being taxed the second time.

 

In my example, I am the one with 1,000,000,000 (wishful thinking). At my death, is the 1 billion taxed BEFORE it is distributed to my heir(s) or after? Assume over the course of my life, I earned 2 billion dollars and paid 1 billion in taxes. If the remaining 1 billion in my estate is taxed (assume 20% for example purposes) BEFORE it is distributed, then I truly have been taxed twice. The original 50% on my 2 billion and then 20% on the remaining billion.

I would think that I should have 1 billion (that I have already paid my taxes for, during the course of my life) to distribute as I see fit and then the heir(s) would be taxed on the amount they receive.

 

I can give you about 5 examples of ranches in my area of the Hill Country, you want names & phone numbers?

As was said earlier, if you spend the time & money to plan properly, you can basically eliminate the estate tax as a burden.

 

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10% finder's fee on all business from the bbs sound about right, Max?

 

actually...you spoke with such resolution and force, i thought we might just given you an endorsement contract.

 

Late night TV...here I come.

 

people ask all the time what our firm does...i like to say, "if you see it advertised on TV, we don't do it."

 

Truth has become a casuality in this thread.

The effective limit for estate taxes in most cases twice what is mentioned here. For example, when a husband dies he can transfer $1 million of their combined assets to his spouse tax free. This $1 million can not be taxed again when the spouse dies and transfers her wealth to her heirs. Thus, the spouse can transfer up to $2 million to her heirs tax free.

The old adage "a fool and his money are soon parted" applies here. If a family farm has to be sold for estate taxes, then fools have been effectively separated from their money.

BTW, I am against most taxes. Now for our government at all levels to operate, taxes will need to be levied. I do not see how this can be done fairly. Someone has to lose. And we should not be surprised to hear the losers b*tch about fairness.

 

C'mon man...I can read cue cards with the best of 'em.

"I...was in...danger...of...losing...my family's..."

 

The money has already had taxes paid on it, why should someone who is inheriting it have to pay ADDITIONAL taxes?

It makes no sense.....

If the money has been taxed, then no taxes, if it is part of a 401k non taxed fund, then tax it as normal.

But, don't DOUBLE tax it.

DD

 

They can even be elected in Missouri!