inheritance tax?

[OutHouse]

Originally posted by: kranky
My inlaws have a family business owned by my wife's uncle. It's been relatively successful over the years. But you could not believe what they have had to go through just to be able to keep the business operating when the uncle dies. The amount of legal fussing is incredible, and the whole point is not to weasel out of anything, but to avoid a fatal scenario imposed by estate taxes....

The business is worth $7 million. It carries $4 million in debt. Net worth = $3 million. If the uncle dies, the estate taxes according to the expensive lawyer would be well over a half-million. The family isn't sitting on piles of cash, everything is in the business. So in order to pay the estate tax, they would have to sell the business, the family members who work there would be out of jobs, and the business would be gone.

To avoid that, there are trusts, complex insurance policies, blah, blah. All that commotion just to keep a marginally profitable business from having to be sold off for estate taxes.

Many, many people get screwed by the estate tax and they aren't all Warren Buffett who can just pick up a phone and sell stock to pay whatever he owes. Family businesses and family farms get torpedoed all the time. They don't have cash, they have property. The only way to pay the tax is to sell the property, which ends the business or the farm. Many of those people don't even know they need to put structures in place to protect their assets. They just want to be farmers or run their business.

thats exactly right. many farms and ranches in colorado have gone out of business when the parents die because the kids have to pay the estate tax on farmland that has been in the family for generations. the estate tax kills small business period. I view it as punishment. you work your life building something and get it worth a couple of mill (which isnt a lot if you really think about it) and whamo when you croke you cant pass it on even if the kids want it because of the damn taxes involved.


Screw buffett and gates and all the super elite wealthy. they dont give a shit about the impact of the estate tax they are heads of HUGE corporations with thousands of employees. im talking about successful small local business mainly family owned.

take a farm, 1 JD tractor with all the implements to plow/plant/harvest a field is 300K. a farms net worth adds up very fast...

 

[OutHouse]

Originally posted by: 0roo0roo

Originally posted by: mugs
Did you miss the $1.5 million exemption part? Inheritance tax is targeted at the rich.

yup, the morality of inherited wealth is questionable. the parents earned it for sure, the children did not. small amounts are fine. we are talking big amounts that lead to sh*theads like paris hilton here you know. wealth that becomes a permanent upper class is bad for society supposedly based on merit.

it would be more of an old european thing if you wanted to protect such aristocratic lines.

plus, wealth is earned from the system of government/society that creates the conditions/workers/infrastructure for it. surely after you die giving a bit back to support the system isn't too much to ask.

as said, wealthy folks with some common sense like warren buffet and bill gates support the inheritance tax.

what is the worth of someone that fights and dies for their country so others can enjoy great wealth for instance? theres more to a country/society than simply personal wealth. you cannot pretend that men are islands and that they create everything they earn by themselves.

Errr WTF????

 

[E equals MC2]

This thread's color is slowly turning into P&N.

 

[SearchMaster]

Originally posted by: Citrix

Originally posted by: IcebergSlim

Originally posted by: GuitarDaddy

Originally posted by: IcebergSlim



1) family dynasties founded this country and will continue to dominate.

Enjoy your life in servitude to Paris Hilton, Brittany Spears kids, Anna Nicoles daughter, and Tony Romo and Jessica Simpsons future spawns Oh, and how can I forget Brad and Angelinas army of adopted children.

they are rich not wealthy.

Shaq is rich. the guy who writes shaqs check is wealthy.

Shaq's net worth is 300M+. That probably qualifies him as wealthy.

 

[OutHouse]

Originally posted by: SearchMaster

Originally posted by: Citrix

Originally posted by: IcebergSlim

Originally posted by: GuitarDaddy

Originally posted by: IcebergSlim



1) family dynasties founded this country and will continue to dominate.

Enjoy your life in servitude to Paris Hilton, Brittany Spears kids, Anna Nicoles daughter, and Tony Romo and Jessica Simpsons future spawns Oh, and how can I forget Brad and Angelinas army of adopted children.

they are rich not wealthy.

Shaq is rich. the guy who writes shaqs check is wealthy.

Shaq's net worth is 300M+. That probably qualifies him as wealthy.

not when you compare that 300m to the bank account of who writes shaqs checks.

 

[drinkmorejava]

Originally posted by: dullard

Originally posted by: IcebergSlim
It is a double tax as well. assuming the income had been taxed the first time around when the earner earned it.

Fix: Eliminate income tax and have all inheritances and gifts over a set amount be taxed at 100%. No more double taxation (for the few hundred people in the world that this tax even affects).

Imagine it: when you live, you never pay a dime in taxes. When you die, you lose everything*, but you don't care since you are dead. Everyone earns their keep and everyone keeps all that they earn while alive. But of course, for some reason you perfer this current system.


* With exceptions to allow surviving spouse and fully dependent children to live.

Ehhh, the few hundred. How about the few million in the US.

Excluding the value of primary residences there were 9.3 millionares in the US in 2006.

http://sev.prnewswire.com/bank...AQTU05201052007-1.html

 

[dainthomas]

Originally posted by: Citrix
thats exactly right. many farms and ranches in colorado have gone out of business when the parents die because the kids have to pay the estate tax on farmland that has been in the family for generations. the estate tax kills small business period. I view it as punishment. you work your life building something and get it worth a couple of mill (which isnt a lot if you really think about it) and whamo when you croke you cant pass it on even if the kids want it because of the damn taxes involved.

No.

Next year, when the threshold rises to $2 million per person, just 123 farms will be subject to the estate tax, the study found. And in 2009, when it rises to $3.5 million, only 65 of the nation's 2.2 million farms will be affected, the study said.

So I doubt there are "many" in Colorado. Unless many is any number greater than 1. In addition, taxes owed can be paid over 14 years at low interest. The business would have to be pretty marginal to go under because of estate tax. Also, making the heir a co-owner of the business eliminates it from the estate totally.

Oh, and this needs to be in P&N.

 

[OutHouse]

Originally posted by: dainthomas

Originally posted by: Citrix
thats exactly right. many farms and ranches in colorado have gone out of business when the parents die because the kids have to pay the estate tax on farmland that has been in the family for generations. the estate tax kills small business period. I view it as punishment. you work your life building something and get it worth a couple of mill (which isnt a lot if you really think about it) and whamo when you croke you cant pass it on even if the kids want it because of the damn taxes involved.

No.

Next year, when the threshold rises to $2 million per person, just 123 farms will be subject to the estate tax, the study found. And in 2009, when it rises to $3.5 million, only 65 of the nation's 2.2 million farms will be affected, the study said.

So I doubt there are "many" in Colorado. Unless many is any number greater than 1. In addition, taxes owed can be paid over 14 years at low interest. The business would have to be pretty marginal to go under because of estate tax. Also, making the heir a co-owner of the business eliminates it from the estate totally.

Oh, and this needs to be in P&N.

I don't believe a word in that NY Times piece. it is totally pro estate tax and trying to prove that farmers are not hit by it. My neighbor has a 1,000 acre farm and he grows corn and barley for Coors he is very worried about what will happen in the future, his farm is worth close to 8 mil if you count the land, buildings, equipment...

 

[KLin]

Originally posted by: drinkmorejava

Originally posted by: dullard

Originally posted by: IcebergSlim
It is a double tax as well. assuming the income had been taxed the first time around when the earner earned it.

Fix: Eliminate income tax and have all inheritances and gifts over a set amount be taxed at 100%. No more double taxation (for the few hundred people in the world that this tax even affects).

Imagine it: when you live, you never pay a dime in taxes. When you die, you lose everything*, but you don't care since you are dead. Everyone earns their keep and everyone keeps all that they earn while alive. But of course, for some reason you perfer this current system.


* With exceptions to allow surviving spouse and fully dependent children to live.

Ehhh, the few hundred. How about the few million in the US.

Excluding the value of primary residences there were 9.3 millionares in the US in 2006.

http://sev.prnewswire.com/bank...AQTU05201052007-1.html

Only 9.3?

 

[dainthomas]

Originally posted by: Citrix

Originally posted by: dainthomas

Originally posted by: Citrix
thats exactly right. many farms and ranches in colorado have gone out of business when the parents die because the kids have to pay the estate tax on farmland that has been in the family for generations. the estate tax kills small business period. I view it as punishment. you work your life building something and get it worth a couple of mill (which isnt a lot if you really think about it) and whamo when you croke you cant pass it on even if the kids want it because of the damn taxes involved.

No.

Next year, when the threshold rises to $2 million per person, just 123 farms will be subject to the estate tax, the study found. And in 2009, when it rises to $3.5 million, only 65 of the nation's 2.2 million farms will be affected, the study said.

So I doubt there are "many" in Colorado. Unless many is any number greater than 1. In addition, taxes owed can be paid over 14 years at low interest. The business would have to be pretty marginal to go under because of estate tax. Also, making the heir a co-owner of the business eliminates it from the estate totally.

Oh, and this needs to be in P&N.

I don't believe a word in that NY Times piece. it is totally pro estate tax and trying to prove that farmers are not hit by it. My neighbor has a 1,000 acre farm and he grows corn and barley for Coors he is very worried about what will happen in the future, his farm is worth close to 8 mil if you count the land, buildings, equipment...

His accountant would have to be gloriously incompetent if his estate had to pay a dime. Even if it did, a trained monkey could make more than enough money off corn to pay what is owed (the way prices are going).

Most stories about thousands of homegrown ma and pa business being driven under by the government and their "death tax" are pure FUD.

 

[dullard]

Originally posted by: drinkmorejava
Ehhh, the few hundred. How about the few million in the US.

Excluding the value of primary residences there were 9.3 millionares in the US in 2006.

http://sev.prnewswire.com/bank...AQTU05201052007-1.html

Ok, now, there are 9.3 total millionaries in the US. I'm not sure how you get 0.3 of a person, but ok.

Just because you are a millionaire, doesn't mean you'll pay any estate tax.

1) You can give away $12k a year to anyone. So can your spouse, totalling $24k/year/person. If you have 10 family members that you want to get your money, that is $240,000/year you can give away tax free. If you have 20 family members, that is $480,000/year you can give away tax free.

2) On top of #1, you can give away $1 million at any time tax free. Give away an appreciating asset and it becomes even better. For example, suppose your business is worth $1 million today and $5 million when you die. If you gave it away when you died, you'd trigger the estate tax ($3 million taxed). If you gave it away just before you died, you'd trigger the gift tax ($4 million taxed). If you gave it away now, it would be tax free.

4) After all that your first $2 million in your estate is tax free.

Lets try an example, you and your spouse are ~65 years old, thus you both will live ~10 more years, and have 3 children and 7 grandchildren that will receive your money. You can thus give away 10*$24,000 = $240,000 a year for 10 years = $2.4 million. Then you can also give away $1 million (hopefully of an appreciating asset). Then your estate is $2 million tax free (using todays number since congress will likely act on in the next couple of years). Total you can give away tax free: $2.4 + $1 + $2 = $5.4 million. Now, if you had planned earlier, and had given that money away for 20 years, that becomes $7.8 million tax free. Then add in things like you can buy the grandchildren's tuition tax free, etc and you are easilly reaching $8 million tax free.

A simple list of current millionaires ignoring debt isn't much. Most of those people won't be subject to any tax at all if they plan properly.

 

[JS80]

Originally posted by: dullard

Originally posted by: IcebergSlim
It is a double tax as well. assuming the income had been taxed the first time around when the earner earned it.

Smple Fix: Eliminate income tax and have all inheritances and gifts over a set amount be taxed at 100%. No more double taxation (for the few hundred thousand people in the world that this tax even affects).

Imagine it: when you live, you never pay a dime in taxes. When you die, you lose everything*, but you don't care since you are dead. Everyone earns their keep and everyone keeps all that they earn while alive. But of course, for some reason you perfer this current system.


* With exceptions to allow surviving spouse and fully dependent children to live.

That is the stupidest thing I have ever heard. Have your grandson sell you his basketball for all your money - voila you just let him inherit all your money.

Plus what happens to the house you live in? Government just takes it?

 

[0roo0roo]

Originally posted by: Don Rodriguez

Originally posted by: mugs

Originally posted by: 0roo0roo

Originally posted by: mugs
Did you miss the $1.5 million exemption part? Inheritance tax is targeted at the rich.

yup, the morality of inherited wealth is questionable. the parents earned it for sure, the children did not. small amounts are fine. we are talking big amounts that lead to sh*theads like paris hilton here you know. wealth that becomes a permanent upper class is bad for society supposedly based on merit.

it would be more of an old european thing if you wanted to protect such aristocratic lines.

plus, wealth is earned from the system of government/society that creates the conditions/workers/infrastructure for it. surely after you die giving a bit back to support the system isn't too much to ask.

as said, wealthy folks with some common sense like warren buffet and bill gates support the inheritance tax.

what is the worth of someone that fights and dies for their country so others can enjoy great wealth for instance? theres more to a country/society than simply personal wealth. you cannot pretend that men are islands and that they create everything they earn by themselves.

Yeah, because it's not like the wealthy pay an assload of taxes while they're alive - hit them up again when they're dead! Your post reeks of socialism. The rich already pay for the infrastructure of this country that allows them to obtain their wealth. They pay a lot more taxes than most of us do.

The morality of inherited money is not questionable, because the person who EARNED it decides who gets it.

:thumbsup:

the wealthy pay a lot of taxes sure. they also derive the most benifits from society. they are hardly being taxed into poverty or anywhere near into the middle class. they are taxed at a level where they remain filthy rich.
frankly thats a problem i think most people wouldn't mind having.

its not about socialism, its about simple reality. wealth is not created in a vacuum. it is created within the system that supports its creation. it is the system that creates the workers and infrastructure that allow the wealth to be created. from government research pushing science ahead in areas of space/health/computing/internet to basic structures of law that guarantee contracts and fairness that all allow a free market to work. look at places where parts are missing like africa, doing business there is beyond risky. if bill gates were born an african do you think he would be rich today? probably not. to give back to the system that made such success possible after you are dead is simply what is owed and frankly hardly a burden. posts like yours reek of profound selfishness. making money is not everything. police men/soldiers/firemen etc lose their lives protecting the system that allows wealth to thrive. is their contribution some how insignificant compared to a businessman? don't try to pretend everyone works alone. like it or not the reality is society is interdependent. the contributions of others allow you to do what you want. without the teacher earning 40k to teach the skilled workers for that business man he could really do nothing.


it is not a double tax, it is a progressive tax. unless you are going to argue for a flat tax, thats what we have in general anyways.

we ask some in this society to pay with their lives. how many have died in iraq for our country.
tell me, what kind of tax is that kind of death compared to a tax on excessive wealth after you won't miss it anymore. if we want to be really selfish, no one would fight for anyone.

 

[Dirigible]

OP: I don't believe this money would be taxed.

Originally posted by: mugs
Did you miss the $1.5 million exemption part? Inheritance tax is targeted at the rich.

I have no problem with inheritance tax. The absence of it would be immoral in my book. But I won't talk about that any more. Too much P&N in this thread already.

 

[dug777]

We don't have inheritance tax/death duties.

The UK/US FTL