Estate Tax

[RandomGuy]

I have said many times that this is the dumbest, most ed up rule that our government has ever come up with.

If for some reason I can somehow manage to outlive my parents and they leave behind enough money that the government can take 50% of it.......that will be close to the end of my life because I will go down in a blaze of glory (young guns style) fighting them off my property.

There is absolutely no good ing reason the gov't should be allowed to tax this money twice........and the argument that it's not taxed twice because the earner will have passed away is the dumbest ing thing I've ever heard.

the government.

The government isn't taxing it twice. It was taxed as income over the years to your parent not you.

You recieve those assets and are better off for the transaction. That is income TO YOU.

Consider the journey of a dollar.

You have a dollar, and you use that dollar to buy a sandwich at the local diner. That is income to the diner. It uses that dollar and pays its water bill. That is income to the utility. The utility uses that dollar and pays an employee. That is income to the employee. That employee then spends it at your business, that is income to you.

At each stage this income is taxed, and is not "double taxation".

Your logic, as usual, is flawed. Unless of course each dollar in existance only gets taxed once, and then is tracked as it moves through the economy never to be taxed again. I'm sure that would suit you, but it would hardly fund the government you want.

[TeyshaBlue]

"quite a large ranch" is not a family farm.

I also pointed out that the exceptions have gotten more generous, and one of the proposals of Mr. Obama makes it even more so. "some years back" is not today, and certainly not an argument to shield the ONLY segment of society that has actually seen their income go up in the last 30 years from paying their fair share.

But hey, he's a socialist, so everything he proposes must be wrong.

lol...in West Texas they are. Takes a billion acres to feed one cow.

[xrayzebra]

RG:

But hey, he's a socialist, so everything he proposes must be wrong.

Pretty much.

By the way have you ever read about some of the
"family" farms in fly over country. They ain't 40
acres and a mule. Some of them are thousands of
acres.

[Blake]

There is absolutely no good ing reason the gov't should be allowed to tax this money twice.

I also hate how a vehicle is taxed every time it changes hands.

[101A]

What it really does is cause the business or farm owner to pay life insurance premiums all his life so that when he dies, that money will be available to pay the estate tax so the family doesn't have to sell the farm or business upon his death.

It’s a huge boon to insurance companies.

This is absolutely correct (Small business owner AND I have a "Group 1" - license to sell life insurance (have never sold a single policy, however).

Gold Star.

[RandomGuy]

So everything Obama proposes is wrong?

RG:

Pretty much.

And the deal President Obama proposed on December 6 promised to be even more generous, allowing for $5 million to be inherited without any tax, and any amount over that minimum would be taxed at 35 percent. So it's fair to assume that even fewer family farms would owe any estate tax at all, let alone need to be sold to pay the tax owed, as Fox & Friends suggested.

So you are against this proposal?

[101A]

Not really.

Fox revives ancient myth that the estate tax kills "a lot of" farms



Further, the Irs website has this bit:



1) Family farms are valued on a favorable basis "as is" rather than on market rates.

2) They are given larger tax-exemptions

3) They get to reduce even the value they have to report by a further $1,000,000

In short, the Fox "news" talking point is pure bull , and provably so.

If you can provide some data to show that this tax really does force "family farms" under, or to be divided up, I would love to see it, because it didn't take much research to find data that contradicts that.

Can't speak of farms; but the poster also referred to family businesses; on this point he is ABSOLUTELY correct.

My business generates a comfortable living for myself and my brother - but nothing that would make any of your eyes pop out of your heads; however to generate that income; our company does produce a lot of gross revenue - large corporations VALUE that revenue - and could buy my company, fire all my employees; merge our systems into theirs; increasing their revenue far more than they increase their costs; thus making my business worth quite a bit if I were to sell it (We could net over 30 year's income if we sold)

Problem; I like my business, and feel a responsibility to my employees; am proud of it, and don't want to sell it - and would like to have the ability to pass it along.....

An onerous inheritance tax threatens that - and I carry a very large life insurance policy to mitigate against it; just as the original poster surmised.

[RandomGuy]

This is absolutely correct (Small business owner AND I have a "Group 1" - license to sell life insurance (have never sold a single policy, however).

Gold Star.

Current proposed rule, as I understand them, allow for businesses of a net worth of $5M or less to be exempt and family farms of up to $6M net worth to be exempt.

Not exactly a "small" business, IMO. Remember, we are talking about NET worth, not total assets.

[RandomGuy]

Can't speak of farms; but the poster also referred to family businesses; on this point he is ABSOLUTELY correct.

My business generates a comfortable living for myself and my brother - but nothing that would make any of your eyes pop out of your heads; however to generate that income; our company does produce a lot of gross revenue - large corporations VALUE that revenue - and could buy my company, fire all my employees; merge our systems into theirs; increasing their revenue far more than they increase their costs; thus making my business worth quite a bit if I were to sell it (We could net over 30 year's income if we sold)

Problem; I like my business, and feel a responsibility to my employees; am proud of it, and don't want to sell it - and would like to have the ability to pass it along.....

An onerous inheritance tax threatens that - and I carry a very large life insurance policy to mitigate against it; just as the original poster surmised.

I think you should have a tax expert estimate your tax liability in that event.

Your life insurance policy could be an unnecessary expense.

You know your position better than I do, just offering a bit of advice, well meant and freely given.

That said, gotta get going. Will check back later.

[101A]

I think you should have a tax expert estimate your tax liability in that event.

Your life insurance policy could be an unnecessary expense.

You know your position better than I do, just offering a bit of advice, well meant and freely given.

That said, gotta get going. Will check back later.

Currently, until something else is passed - my estate will be taxed at 55% above $1.1 million if I die after January first - if the compromise goes through, I can reduce, but not fully eliminate the policy (although the deal, ultimately, is only for two years - don't think I'm willing to role those dice).

[Wild Cobra]

hey, if you want big govt to save us from terrorists, poverty, starvation, epidemics, global temp increas...got to pay the piper...

Then add to the tax code voluntary taxation, where those who want particular programs pay more.

[Wild Cobra]

The government isn't taxing it twice. It was taxed as income over the years to your parent not you.

You recieve those assets and are better off for the transaction. That is income TO YOU.

If it is income, then why are you taxed capital gains when you sell it?

Tell me that isn't taxed twice. To include the original makes it taxed three times.

[boutons_deux]

"why are you taxed capital gains when you sell it"

because it's capital gains, duh.

[Wild Cobra]

"why are you taxed capital gains when you sell it"

because it's capital gains, duh.

So you admit. It's double taxation.

Good.

[Winehole23]

Senate leaders released an agreement crafted by the White House and Republicans to sustain Bush-era tax rates through 2012, set the estate tax at the lowest rate in 80 years, extend jobless aid and cut payroll taxes by 2 percentage points...

...The congressional Joint Committee on Taxation, which estimates the revenue effects of tax legislation, said the provisions would cost the government $801.3 billion in forgone revenue over 10 years. Extending unemployment benefits for 13 months, another feature of the package, would cost $56 billion, the Obama administration has said.



The proposal would extend Bush-era tax cuts for all levels of income. A two-year extension of those rates would cost $407.6 billion, according to the Joint Committee on Taxation.



The measure would keep the reduced tax rates enacted in 2001 and 2003 on income, capital gains and dividends from expiring on Dec. 31. That would preserve the current 15 percent rate for most dividends and capital gains as well as the 10, 15, 25, 28, 33, and 35 percent income-tax rates.

Test vote is scheduled for Monday.

http://www.bloomberg.com/news/2010-1...n-to-debt.html

[Wild Cobra]

Test vote is scheduled for Monday.

http://www.bloomberg.com/news/2010-1...n-to-debt.html

Yes, heard that on the radio before i got home 1-1/2 hrs ago.

Test vote... that makes me laugh!

[RandomGuy]

So you admit. It's double taxation.

Good.

You invest a $100, on which you have already paid income taxes.

After two years, you sell the asset you purchased for $110.

What is the taxable income produced by this transaction?

For someone with the capacity to ferret out trillion to one probabilities when it comes to global climate, this simple math should be a walk in the park.

[Winehole23]

The $1,000 child credit would avoid being cut in half, the abolishment of the so-called marriage penalty would be retained, and tax credits subsidizing adoption, higher education and child care would be extended.



The bill includes provisions from last year’s economic- stimulus law that Democrats favor, including a Treasury grant in lieu of tax credits for solar, wind and renewable energy conversion. The change helps companies that are unprofitable and couldn’t take advantage of the credits.



The bill would extend federal unemployment insurance for the long-term jobless for 13 months, covering all of 2011, and cut workers’ share of Social Security taxes to 4.2 percent. It would temporarily index the alternative-minimum tax, rolling back a $136.7 billion tax increase set to affect an estimated 21 million Americans this year and next.

http://www.bloomberg.com/news/2010-1...n-to-debt.html

[Wild Cobra]

You invest a $100, on which you have already paid income taxes.

After two years, you sell the asset you purchased for $110.

What is the taxable income produced by this transaction?

For someone with the capacity to ferret out trillion to one probabilities when it comes to global climate, this simple math should be a walk in the park.

$10 is taxable, but shouldn't be. The code unless changed while I wasn't looking does not consider inflation on the $10 you gained. If you only made a $10 gain after 5 years of holding it, you have a loss due to inflation.

In this case, if you get $1 million is assets for $0, pay an approximate 50% in estate taxes, and sell it for $1,000,000, you also pay capital gains on $1 mil. That is unless you can write off the 1/2 mil in taxes.

Why not just pay capital gains taxes when you sell any gained assets?

[Wild Cobra]

http://www.bloomberg.com/news/2010-1...n-to-debt.html

All those tax credits need to go away. If they want to retain an incentive for these items, then make them tax deductible. Not tax credits.

[RandomGuy]

It's double taxation.

You invest a $100, on which you have already paid income taxes.

After two years, you sell the asset you purchased for $110.

What is the taxable income produced by this transaction?

$10 is taxable, but shouldn't be.

If it were really double taxation, then you would be taxed on the $110, not just the $10 gain.

Where is the double taxation on you? or were you wrong when you said it was double taxation?

[RandomGuy]

$10 is taxable, but shouldn't be. The code unless changed while I wasn't looking does not consider inflation on the $10 you gained. If you only made a $10 gain after 5 years of holding it, you have a loss due to inflation.

In this case, if you get $1 million is assets for $0, pay an approximate 50% in estate taxes, and sell it for $1,000,000, you also pay capital gains on $1 mil. That is unless you can write off the 1/2 mil in taxes.

Why not just pay capital gains taxes when you sell any gained assets?

No. Seriously?

After you have paid the estate taxes, you then have post tax income of $500,000. This becomes the "tax basis" for your investment.

If you then invest it, and sell that investment for $1,000,000, you subtract your basis, $500,000 to get your taxable income of $500,000

An economic gain that currently costs you 15% in taxes.

If you had simply earned that through income, you would pay closer to 35% of that.

In effect, people who work for a living subsidize those who sit on their asses and let their money work for them, such as lazy s like Paris Hilton, who is simply the beneficiary of her parent's wealth.

[Wild Cobra]

If it were really double taxation, then you would be taxed on the $110, not just the $10 gain.

Where is the double taxation on you? or were you wrong when you said it was double taxation?

I cannot believe you don't follow.

I don't know how to explain it to you if you fail to understand my point. Yes, it would be double taxation to be taxed on the $110. However, taxes were already paid on the $100. That's why only the $10 is taxed. In the case of inheritance, not only was taxes paid as the person who died gained the wealth, but now we are taxing the gain. Not that this money is taxed, arguable twice already, what is there still a tax when you sell these newly acquired assets as capital gains?

Estate tax + capital gains tax = double taxation. Triple if you count the initial tax in acquiring the wealth by the deceased.

[Wild Cobra]

No. Seriously?

After you have paid the estate taxes, you then have post tax income of $500,000. This becomes the "tax basis" for your investment.

If you then invest it, and sell that investment for $1,000,000, you subtract your basis, $500,000 to get your taxable income of $500,000

An economic gain that currently costs you 15% in taxes.

If you had simply earned that through income, you would pay closer to 35% of that.

In effect, people who work for a living subsidize those who sit on their asses and let their money work for them, such as lazy s like Paris Hilton, who is simply the beneficiary of her parent's wealth.

Crybaby...

It aint fair...

that's a di able at ude you display. To think people don't deserve their money.

You liberals are unethical and godless. How can anyone with an at ude like yours be Christian like some liberals claim to be?

You shall not covet your neighbor's house. You shall not covet your neighbor's wife, or his manservant or maidservant, his ox or donkey, or anything that belongs to your neighbor.

– Exodus 20:17 (NIV)

Again, liberals are Godless.

[RandomGuy]

I cannot believe you don't follow.

I don't know how to explain it to you if you fail to understand my point. Yes, it would be double taxation to be taxed on the $110. However, taxes were already paid on the $100. That's why only the $10 is taxed. In the case of inheritance, not only was taxes paid as the person who died gained the wealth, but now we are taxing the gain. Not that this money is taxed, arguable twice already, what is there still a tax when you sell these newly acquired assets as capital gains?

Estate tax + capital gains tax = double taxation. Triple if you count the initial tax in acquiring the wealth by the deceased.

Already addressed.

The government isn't taxing it twice. It was taxed as income over the years to your parent not you.

You recieve those assets and are better off for the transaction. That is income TO YOU.

Consider the journey of a dollar.

You have a dollar, and you use that dollar to buy a sandwich at the local diner. That is income to the diner. It uses that dollar and pays its water bill. That is income to the utility. The utility uses that dollar and pays an employee. That is income to the employee. That employee then spends it at your business, that is income to you.

At each stage this income is taxed, and is not "double taxation".

Your logic, as usual, is flawed. Unless of course each dollar in existance only gets taxed once, and then is tracked as it moves through the economy never to be taxed again. I'm sure that would suit you, but it would hardly fund the government you want.

Using your logic, if a dollar passes through more than one hand in a year, it is "double taxed".

Currently, it is estimated, if memory serves, that any given dollar in circulation passes through 7 hands in a given year, i.e. the "velocity of money".

Do you consider these seven different people as having been "septuple taxed"??