My position is even though I DO have issues with the estate tax ANYONE who believes in stable and consistently applied rules should look at this situation askance. By the IRS's own guidelines this should have 0 value.
-
Hey, guest user. Hope you're enjoying NeoGAF! Have you considered registering for an account? Come join us and add your take to the daily discourse.
Couple inherits art it can't sell, IRS says it owes $29M in death taxes
- Thread starter Kosmo
- Start date
- Status
My position is even though I DO have issues with the estate tax ANYONE who believes in stable and consistently applied rules should look at this situation askance. By the IRS's own guidelines this should have 0 value.
Partial Gamification
Banned
"Family" farms can setup corporations that own the assets and get around the death-tax.
There are more exemptions for farmers but the individuals need a good attorney / accountant. This is a subject in most agricultural schools.
The Technomancer
card-carrying scientician
On the one hand it seems wrong to tax something valued at $0
On the other hand I cannot feel any actual sympathy for these people. They may be in the right but I don't feel bad for them because either way this turns out I doubt their finances are going to be in any kind of trouble.
On the other hand I cannot feel any actual sympathy for these people. They may be in the right but I don't feel bad for them because either way this turns out I doubt their finances are going to be in any kind of trouble.
lunarworks
Member
I'm Canadian. Moving $10,000 across a border opens up a bigger can of worms than that.
Jason's Ultimatum
Member
Anyone still have that political cartoon that tries to explain transactions and taxes?
Suppose the government decided to fine you $10 a month for life. Now, that's not going to kill you anytime soon (I'm guessing at least) but should then NO ONE feel any sympathy for you just because you can probably handle a fine like that?
Yeah, lets get...
...
Oh.
*slowly puts WALK OFF!!! banner away*
I won't commend on the taxes they should/shouldn't have to pay since I'm no US tax lawyer, but I would be PISSED to have to pay even a few cents to have to have own this thing. Err, sculpture.
The Technomancer
card-carrying scientician
Sympathy? No, not really, not if its not having any noticeable effect on my lifestyle. I mean, the government could totally do that next month in the form of an incredibly tiny tax increase.
I'm departing from my usual "statistics uber alles" approach to simply say that its hard for me to feel bad for them. It would be like if, when my grandfather died, there was a quibble over a few hundred dollars. Yeah its money that people care about but its very unlikely that that money is going to make or break anyone.
BertramCooper
Banned
True, but not all farms have the resources or foresight to do so. Which is sad.
Proper estate planning has become a huge topic in ag.
If I'm reading the OP correctly, the piece can't be sold since it includes a stuffed Eagle (I assume since they are endangered)?
If that's the case then this is bullshit. Whether they are rich or not, the idea of the government appraising something that cannot be sold is ridiculous.
If that's the case then this is bullshit. Whether they are rich or not, the idea of the government appraising something that cannot be sold is ridiculous.
Difference being we're talking about something the government is doing that ONLY targets you in a unique situation.
This is a surprisingly even handed if snarky assessment of the situation at hand.
Nobody is claiming as such. But I think you set a dangerous precedent if that is your standard of tolerance when it comes to the government taking money from you.
Sirpopopop
Member
Taking away the fact that they can probably pay these taxes and they aren't destitute...
There are two questions that need to be answered here:
1.Should we tax people for inheriting a property whose value they can't realize?
2. Should the fact that the property can't be sold matter for IRS valuations?
There are two questions that need to be answered here:
1.Should we tax people for inheriting a property whose value they can't realize?
2. Should the fact that the property can't be sold matter for IRS valuations?
The Technomancer
card-carrying scientician
Oh I still think its wrong, I don't think it should be "tolerated". But I'm not angry about it.
Wuthering_Heights
Banned
Man, this thread.
If I ever get to a point in my life where I hate people simply because they have more than me... that will be a sad day.
Hope it all works out for them, some pretty shitty moves by the IRS.
If I ever get to a point in my life where I hate people simply because they have more than me... that will be a sad day.
Hope it all works out for them, some pretty shitty moves by the IRS.
Jason's Ultimatum
Member
I really don't understand why some people are arguing that inhereting a large amount of money isn't considered income.
Teddy Roosevelt:
Teddy Roosevelt:
You just described 60 percent of GAF. Enjoy your stay.
Suikoguy
I whinny my fervor lowly, for his length is not as great as those of the Hylian war stallions
Yep, i'd be surprised if it even goes to court.
Most likely someone higher up at the IRS says it's not worth the trouble after reviewing the case, and the whole thing disappears.
What large amount of money was inherited in the case of this specific piece of art?
Jason's Ultimatum
Member
I REALLY do not think people having more material goods than whatever number you came up about GAF is the issue. This is strictly a economic issue and about fairness.
While I agree the IRS is being dickish, I don't have a great deal of sympathy for the people who will remain multi millionaires afterward, regardless.
Estate taxes in general are a good thing, as long as they have limits. I don't want people being rich only becuase of their great grandfathers hard work.
Estate taxes in general are a good thing, as long as they have limits. I don't want people being rich only becuase of their great grandfathers hard work.
Sanky Panky
Banned
Some valuable contraband.
This matter could be resolved by the court saying that the previous legal exception can be passed down too.
No one is trying to take it away from them, the previous owner's waiver is still being honored in this case of ownership transfer, setting a clear precedent for acceptable transfer in a non-financial fashion in the future. This is a slam dunk legal case.
Further, the law regarding ownership of eagle remains is tied to the emphasis on individual ownership. Many non-profit museums and the like display stuffed eagles that predate the law, as this one does.
It could easily be transferred to a contemporary art museum with little to no hassle.
Charitable donations by their very definition must go to a non-profit. Non-profits are tax exempt entities.
1. there are less than 110 small farms and family own businesses in the U.S. that would owe anything under the previous estate tax laws.
2. there is no recorded example, despite heavy searching, of a family losing it's farm due to estate taxes.
3. there are ample programs set up to guide family farms down the path of appropriate corporate structures that would protect them from these issues well in advance.
Not properly planning your estate is not the problem of the federal government.
Couldn't you just provide an interest free loan repayable "on demand?"
Soon, we'll all be taxed on unsellable art we inherited because said art contains a preserved endangered species!
A bleak future indeed.
I can't say that I'm sorry for them, if they had no emotional attachment to said art.
There are two factors that I think taxing inheritance should take into account. One is the aspect of reducing wealth accumulation into a few families and hinder the formation of undue concentrations of influence. The other is the vague concept of fairness.
Paying out for inhereting the family home where you grew up and that has been with the family for generations is a bit different than paying for getting unknown uncle Bob's paintings that are worth more than a fair sized mountain of gold.
There are two factors that I think taxing inheritance should take into account. One is the aspect of reducing wealth accumulation into a few families and hinder the formation of undue concentrations of influence. The other is the vague concept of fairness.
Paying out for inhereting the family home where you grew up and that has been with the family for generations is a bit different than paying for getting unknown uncle Bob's paintings that are worth more than a fair sized mountain of gold.
Partial Gamification
Banned
Agreed, it is very sad.
TheNatural
My Member!
Can they just throw the fucking thing away and be done with it?
BigBlue1974
Member
Agreed. Can't believe how much hate there is in this thread simply because someone out there has more than they do.
It does sound like they have the money from the sale of other items so they aren't screwed even if the IRS(wrongly) wins here, but can you imagine if they were only given this 1 item in the will.
You think money should be taxed as a one time fee upon its creation?
Using the broadest definition of the money supply, there's about $10T in the US.
That means the total amount of taxes paid throughout the course of the US's history, adjusted for inflation would be, well, the tax rate * $10 Trillion.
If we did that, we would have hyperinflation year over year as the government printed exponentially higher amounts of money year over year to fund its activities, and it would continue to fall short by greater and greater amounts every year. Among other problems.
You're the one who made the issue about "death taxes."
They could have disclaimed it if they didn't want this problem. It's an interesting issue though, because if they were able to sell it at some point, it'd be worth millions and millions. Is it fair to let them inherit it tax free when it has such a high value that simply can't be realized right now? Could these people get a waiver to sell it?
Not an unreasonable position, which is why United States estate tax begins at five million dollars. If your family house is worth more than that, I don't think it's unreasonable to ask you to chip some in.
I think it's somewhat problematic that people don't know this, in general, but I also suspect it's because there are media organizations with a vested interest in making sure people don't really understand how the estate tax works. The only person posting on this board who's likely to have to pay it is EvilLore.
diffusionx
Gold Member
That is income to lunarworks and as such, yea it is taxed. Same as if lunarworks won $10,000 from the lottery.
If you let people give each other gifts tax-free, you open up a HUGE loophole that could be used to basically not pay any tax at all. Company decides to give the CEO a "gift" of $10 million every year, oh that's not taxed.
I mean, maybe you'd support that, but that's a different topic altogether.
Yeah, of course money can be taxed multiple times, it's how shit works. I don't understand positions like that.
phosphor112
Banned
Congrats IRS. Tax those that don't need to be taxed but ignore those rich fuckers that hide all their money.
WAT?
Pretty much this. I wish the IRS would get this tough on companies that dodge their taxes...
travisbickle
Member
I call it the "bootstrap tax", if you haven't earned enough in your life to inherit your family's estate then you just haven't worked hard enough, and someone who has worked harder than you will get to buy your estate.
ReBurn
Gold Member
The whole thing is explained very concisely here:
http://www.irs.gov/irm/part21/irm_21-007-005r.html
You can't write the value off of something that's worth $0, as explained in the NYT article. So they can donate it to a public institution, but would still have to pay the tax on it.
I don't feel particularly sad for these people, but bullshit is bullshit, and what the IRS is doing is bullshit. It's almost like they want them to sell it illegally, which is messed up.
Here's a list
Here's an example
Bald Eagles just get a ton of press because of their status to our nation.
If they win their case against the IRS and subsequently sell the piece, then they would presumably be doing so with a basis of $0, and would therefore be taxed on any income they received. The rub here, is that the amount of tax assessed in this situation would be significantly less than what is owed under the estate tax.
What's interesting, is that the IRS seems to be ignoring its own regulations when assessing this piece at such a high value. IRS regs state that:
The fair market value is the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts. The fair market value of a particular item of property includible in the decedent's gross estate is not to be determined by a forced sale price. Nor is the fair market value of an item of property to be determined by the sale price of the item in a market other than that in which such item is most commonly sold to the public, taking into account the location of the item wherever appropriate.
26 C.F.R. § 20.2031–1(b) I would say that a very relevant fact is that it is against the law to sell the piece, which is why Christie's valued it at zero. Now, we know that the decedent obtained a waiver to possess the piece, but can the heirs obtain a similar waiver to allow them to sell it? If they cannot obtain this waiver, then I think the IRS's assessment of its value is on shakey ground. If, however, they could obtain the waiver but simply do not want to part with the artwork, then I think the IRS stands a strong chance of prevailing on the issue.
- Status