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[mre]

But they also quote a lawyer saying that case law supports the IRS here.

Should have replied to you with this as well, but I'll re-paste it here:

I think this case is factually different from the precedent case law, in that we're dealing with something, as you mention below, that is legal to possess, but illegal to sell. Drugs, stolen artwork, etc., are all contraband items, the possession of which is illegal in and of itself. The black market is the only market available for the transfer of those products. This is a piece of art, legally obtained, the disposition of which is constrained by law.​

So I'm almost certainly fucked. Well it's nice knowing that upfront.

I'm assuming that your parents are working with a tax attorney and accountant and are taking measures to limit their exposure to the estate tax.

 

[Sho_Nuff82]

I'm not sure what the big deal is about 'death taxes'. It seems like a good thing, if anything inheritance should be gotten rid of or at least curtailed in some form. If people on the right want to talk about personal responsibility and bootstraps surely they would agree a man should work for what he wants/earns?

I think the entire point of "The American Dream" is working hard to provide a better life for your family. You're jumping out the window a little bit with this assertion.

 

[Jarmel]

Inheriting millions of dollars and owing less than half in taxes is "fucked" now? Interesting.

I have no clue what I'm going to be making 5-10 years down the road. Especially with the way the market is, I might even be unemployed.

 

[Zaraki_Kenpachi]

Whatever floats your boat to let you rationalize it in your mind.

Let's say my parents are getting older, own a house that would qualify for the estate tax, and I'm living with them to help them out. The house is paid for, there's enough money in the bank to live on (not exhorbitant, just enough to pay the property taxes, food, utilities, etc). My parent die, and I inherit the house, only now I am hit with a tax bill that is much more than I have in the bank, so now, instead of just remaining in the house, I have to figure out a way to sell it, give half of that to the government, and find a new house to live in.

Why does that make sense in your mind, other than supporting confiscatory tax policies?

Because the property is changing hands? What don't you understand? How is this different than if they gave you the house 10 years earlier and you both lived there?

 

[pigeon]

So I'm almost certainly fucked. Well it's nice knowing that upfront.

I doubt that very much. mre says "if Congress doesn't act, the tax rate will drop," but that's just how Congress operates -- the Bush tax cuts, the donut hole, and the doc fix are all examples of things Congress handles, or has handled, on a periodic renewal basis. Unless your parents are bedridden, I'd expect the estate tax values to go up well before you have to worry about them -- the Democratic position is $3.5 million per person and the Republican position is $5 mill. The only reason it might drop to $1 million per person is good old-fashioned Republican intransigence at cutting taxes for people who aren't the 1%.

 

[ronito]

Whatever floats your boat to let you rationalize it in your mind.

Let's say my parents are getting older, own a house that would qualify for the estate tax, and I'm living with them to help them out. The house is paid for, there's enough money in the bank to live on (not exhorbitant, just enough to pay the property taxes, food, utilities, etc). My parent die, and I inherit the house, only now I am hit with a tax bill that is much more than I have in the bank, so now, instead of just remaining in the house, I have to figure out a way to sell it, give half of that to the government, and find a new house to live in.

Why does that make sense in your mind, other than supporting confiscatory tax policies?

Aren't ALL taxes confiscatory.
Now let's say your parents lived and gave you the house. You'd be in the same situation.
But without all the indignation.

Don't really see how the state of your parents has anything to do with the situation here. A transaction is a transaction is a transaction.

 

[Chumly]

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.

Yep and frankly it's sad that people still believe this myth. You can defer the taxes as well if for some reason you manage to fall into that incredibly small category.

 

[RDreamer]

Why does that make sense in your mind, other than supporting confiscatory tax policies?

How about supporting logical tax policies that contribute to a healthy economy and class system in the country? That's why I'd support it. You're gaining a ton of wealth. Why should you not have to pay some of that back in?

I have no clue what I'm going to be making 5-10 years down the road. Especially with the way the market is, I might even be unemployed.

... but you're gaining millions of dollars worth of stuff? If you're unemployed, then congrats, you just gained millions of dollars. Where's the "you're fucked" in this at all? I mean I guess it'd be sad in a way to have to sell your parents home, but... if you don't have enough to pay for it then you don't have enough to pay for it. Also, if you're unemployed even without the estate taxes on it wouldn't your property taxes from living there be impossible to sustain anyway?

 

[Tapiozona]

I have no clue what I'm going to be making 5-10 years down the road. Especially with the way the market is, I might even be unemployed.

An unemployed millionaire though. "Fucked" probably isn't the right word.

 

[ProfessorLobo]

Please. You guys think it's reasonable to charge $29 million in taxes for something, based on an appraisal by the same people (IRS) who are getting the money, that's actually worth $0? Get your heads out of your asses.

Finally someone says it.

 

[nVidiot_Whore]

So donate the damn thing to a museum.

Wouldn't they avoid taxes on it that way?

That penalty though is pretty ridiculous.

 

[twobear]

Please. You guys think it's reasonable to charge $29 million in taxes for something, based on an appraisal by the same people (IRS) who are getting the money, that's actually worth $0? Get your heads out of your asses.

You think that its value is $0 just because they can't legally sell it?

Whom has whose head in whose ass, exactly?

 

[AgentP]

It boggles my mind that the same money can be taxed multiple times. I made the money, and I paid income tax on it. Then I die, and my son gets the money. Oh, he has to pay income tax on it again!


Fucking ridiculous.

Seriously. I pay tax on my income, then pay tax when I buy a car, then pay tax on the gas. You pay tax when the money moves. It's not like someone pays tax on amount $Y and amount $Y is tracked from person to person over decades and marked as tax exempt.

So donate the damn thing to a museum.

Wouldn't they avoid taxes on it that way?

That penalty though is pretty ridiculous.

Yes, but then it would not make a good Fox news front page anti-tax story. These poor uber rich people and their problems.

 

[Ferrio]

Boofucking hoo.

Let's whine about people inheriting millions of dollars, but fuck the kid that can't get healthcare.

 

[Zaraki_Kenpachi]

I have no clue what I'm going to be making 5-10 years down the road. Especially with the way the market is, I might even be unemployed.

What does this have to do with anything? Who cares how much you're making?

 

[Kosmo]

You think that its value is $0 just because they can't legally sell it?

Whom has whose head in whose ass, exactly?

So let's break this down. Forget about the $1B art collection. Let's say this couple was just some middle class couple who has a rich uncle who owned that ONE piece of artwork. He dies and leaves it to them and suddenly they have a $29M tax bill.

How should they pay that?

 

[Jarmel]

... but you're gaining millions of dollars worth of stuff? If you're unemployed, then congrats, you just gained millions of dollars. Where's the "you're fucked" in this at all? I mean I guess it'd be sad in a way to have to sell your parents home, but... if you don't have enough to pay for it then you don't have enough to pay for it. Also, if you're unemployed even without the estate taxes on it wouldn't your property taxes from living there be impossible to sustain anyway?

I suppose that's true. I meant fucked more in the terms of me getting hit by the taxes. Reading up on it, it seems it wouldn't be detrimental to my lifestyle at whatever point and would just hurt any potential benefit I could get off their deaths. I would only have to pay half but I could sell the other half if I wanted to. That's fine I suppose as I shouldn't be inherently rich because my parents are.

 

[mre]

So let's break this down. Forget about the $1B art collection. Let's say this couple was just some middle class couple who has a rich uncle who owned that ONE piece of artwork. He dies and leaves it to them and suddenly they have a $29M tax bill.

How should they pay that?

As has been suggested previously, disclaim the hell out of it.

 

[diffusionx]

Whatever floats your boat to let you rationalize it in your mind.

Let's say my parents are getting older, own a house that would qualify for the estate tax, and I'm living with them to help them out. The house is paid for, there's enough money in the bank to live on (not exhorbitant, just enough to pay the property taxes, food, utilities, etc). My parent die, and I inherit the house, only now I am hit with a tax bill that is much more than I have in the bank, so now, instead of just remaining in the house, I have to figure out a way to sell it, give half of that to the government, and find a new house to live in.

Why does that make sense in your mind, other than supporting confiscatory tax policies?

That's a pretty nice fucking house.... and a ridiculously contrived scenario.

I don't think many older people are cash-poor in $5 million houses. If they are, then they are incompetent, because there are so many easy and legal methods to avoid the estate tax - methods that people who were successful enough to eventually live in $5 million houses would be familiar with.

These appeals to theoretical scenarios are bullshit. The estate tax simply does not apply to the vast, vast, vast majority of people. This is by design.

http://www.taxpolicycenter.org/briefing-book/key-elements/estate/who.cfm

■TPC estimates that 8,600 individuals dying in 2011 will leave estates large enough to require fil-ing an estate tax return (estates with a gross value under $5 million need not file a return in 2011). After allowing for deductions and credits, an estimated 3,270 estates will owe tax. Roughly 90 percent of these taxable estates will come from the top ten percent of income earn-ers and nearly half will come from the top one percent alone (see table).

3,270 estates will owe tax... out of how many people who die?

 

[Zaraki_Kenpachi]

I suppose that's true. I meant fucked more in the terms of me getting hit by the taxes. Reading up on it, it seems it wouldn't be detrimental to my lifestyle at whatever point and would just hurt any potential benefit I could get off their deaths. That's fine I suppose as I shouldn't be inherently rich because my parents are.

Dude, what the hell are you talking about? Gaining millions and millions of dollars is still pretty rich, I'm not sure what you're getting it. You make it sound like you lose all benefit after taxes which is so grossly untrue it's not even funny.

 

[Jarmel]

Dude, what the hell are you talking about? Gaining millions and millions of dollars is still pretty rich, I'm not sure what you're getting it.

I wouldn't be getting anything remotely approaching millions of dollars even if the IRS didn't touch anything.

 

[ronito]

So let's break this down. Forget about the $1B art collection. Let's say this couple was just some middle class couple who has a rich uncle who owned that ONE piece of artwork. He dies and leaves it to them and suddenly they have a $29M tax bill.

How should they pay that?

You mean there's no bank that would give them a $29 million dollar loan to get a cut of selling a $1B piece of art work?!

 

[Dead Man]

So let's break this down. Forget about the $1B art collection. Let's say this couple was just some middle class couple who has a rich uncle who owned that ONE piece of artwork. He dies and leaves it to them and suddenly they have a $29M tax bill.

How should they pay that?

I don't think too many posters have suggested this is a fair situation, while not really caring because they CAN pay it.

 

[p2535748]

You think that its value is $0 just because they can't legally sell it?

Whom has whose head in whose ass, exactly?

Isn't the value of something what someone will pay for it? If no one can legally pay for it, then shouldn't the value be zero?

To be clear, I'm not arguing against estate taxes, but I'm sort of amazed that people are okay with the IRS making up a valuation on this and then demanding money based on that valuation. Why does the IRS get to decide what it's worth? Doesn't that seem like a conflict of interest?

 

[RDreamer]

So let's break this down. Forget about the $1B art collection. Let's say this couple was just some middle class couple who has a rich uncle who owned that ONE piece of artwork. He dies and leaves it to them and suddenly they have a $29M tax bill.

How should they pay that?

Disclaim it.

In this instance I think the problem kind of lies in the law that you can't sell anything with an eagle as part of it, even with the papers saying it was made before the ban and thus legal to own. Really, isn't that the law you should want to change? How many other instances of inheriting something banned to sell but legal to have are there?

 

[Cat Party]

I wouldn't be getting anything remotely approaching millions of dollars even if the IRS didn't touch anything.

?

Then you have nothing to worry about.

 

[Zaraki_Kenpachi]

I wouldn't be getting anything remotely approaching millions of dollars even if the IRS didn't touch anything.

So what are you talking about then? How do you lose all benefit?

 

[RDreamer]

I wouldn't be getting anything remotely approaching millions of dollars even if the IRS didn't touch anything.

You'd be getting millions of dollars worth of stuff, which you would then theoretically have to sell (a. because you can't afford to live there anyway and b. because of the estate taxes). Thus, you will have millions of dollars after you sell it (even after the estate taxes).

 

[Zzoram]

So I'm almost certainly fucked. Well it's nice knowing that upfront.

Boo hoo, you're inheriting millions of dollars of assets you never earned and you're fucked because you have to pay tax on it?

Even if you're unemployed in 5 years you will still have millions of dollars more than a typical unemployed person, and millions of dollars more than even a typical employed person, and it won't be because you earned it either.

If you inherit less than a million you don't even get taxed. Even if you inherit more than a million, chances are you won't get to the tax cut off when the higher cut off is inevitably extended.

 

[HamPster PamPster]

How should they pay that?

Bootstraps!

 

[Jarmel]

So what are you talking about then? How do you lose all benefit?

I have a sister so any sort of amount I could get is automatically cut in half. So the most I could get pretaxes is 1.2.

 

[twobear]

Isn't the value of something what someone will pay for it? If no one can legally pay for it, then shouldn't the value be zero?

Again, this seems to commit you to claiming that value of all the illegal drugs in the USA is $0.

 

[Technosteve]

death taxes were implemented to prevent wealth from being hoarded by one family, it came as a result of the gilded age.

 

[mre]

I have a sister so any sort of amount I could get is automatically cut in half. So the most I could get pretaxes is 1.2.

Do your parents have no assets other than a $2.5m house?

 

[Dead Man]

Again, this seems to commit you to claiming that value of all the illegal drugs in the USA is $0.

For the purposes of estate tax? Probably is.

 

[Kosmo]

Again, this seems to commit you to claiming that value of all the illegal drugs in the USA is $0.

Is the IRS now accepting taxes on the sale of illegal drugs? Where does that go on my 1040?

 

[Zaraki_Kenpachi]

I have a sister so any sort of amount I could get is automatically cut in half. So the most I could get pretaxes is 1.2.

Again, so how do you lose all benefit? Please keep sidestepping the issue instead of responding. What the hell does you having siblings have to do with tax law?

 

[mre]

Is the IRS now accepting taxes on the sale of illegal drugs? Where does that go on my 1040?

Yes? Hence them charging Al Capone for tax evasion for failing to report his illicitly gained bootlegging income.

 

[Chumly]

I have a sister so any sort of amount I could get is automatically cut in half. So the most I could get pretaxes is 1.2.

Then your not going to be taxed? What are you complaining about. Frankly If your concerned about maximizing your millions while not working then you are the definition of the lazy American

 

[Zzoram]

I have a sister so any sort of amount I could get is automatically cut in half. So the most I could get pretaxes is 1.2.

You're fucked because you may get $1.2 million you didn't earn?

 

[Guevara]

Is the IRS now accepting taxes on the sale of illegal drugs? Where does that go on my 1040?

The IRS expects taxes from marijuana dispensaries, despite being illegal at the federal level.

Or just ask Al Capone about not paying taxes on illegal income.

 

[AbortedWalrusFetus]

Do your parents have no assets other than a $2.5m house?

That's not that unreasonable. My grandparents bought their house for $60k, and it's valued at $2M now. In their case they do have more assets, but I can completely imagine how for some they may not. As it is, when my grandmother dies and inheritance taxes apply there may not be enough money to cover the house and we'll have to sell it. There are memories in that house for three or four generations of people and we may not be able to keep it in the family. It's really sad, actually.

 

[Zaraki_Kenpachi]

That's not that unreasonable. My grandparents bought their house for $60k, and it's valued at $2M now. In their case they do have more assets, but I can completely imagine how for some they may not. As it is, when my grandmother dies and inheritance taxes apply there may not be enough money to cover the house and we'll have to sell it. There are memories in that house for three or four generations of people and we may not be able to keep it in the family. It's really sad, actually.

But the ceiling is still $5 mil so...?

 

[AbortedWalrusFetus]

But the ceiling is still $5 mil so...?

Is it? I thought the ceiling was $2M. If so, good news.

 

[p2535748]

Again, this seems to commit you to claiming that value of all the illegal drugs in the USA is $0.

No it doesn't. We clearly know the value of drugs because people are buying and selling them all the time, so we have a sense of their value. The government doesn't allow you to inherit them, so it's an entirely different situation.

The situation here is the government saying "if you want this piece of inheritance, give us $29 million, and then once you have it, we'll arrest you if you try and sell it". That seems sort of crazy to me.

 

[Dead Man]

That's not that unreasonable. My grandparents bought their house for $60k, and it's valued at $2M now. In their case they do have more assets, but I can completely imagine how for some they may not. As it is, when my grandmother dies and inheritance taxes apply there may not be enough money to cover the house and we'll have to sell it. There are memories in that house for three or four generations of people and we may not be able to keep it in the family. It's really sad, actually.

Even without that, often a family house is sold simply becuase no relative can afford to buy out the others of their remaining share. Happens every day. It sucks, but it happens all the time. If you're parent is an only child that may not be the case, but when there are multiple siblings and a house to inheret, it often gets sold regardless.

 

[Chumly]

That's not that unreasonable. My grandparents bought their house for $60k, and it's valued at $2M now. In their case they do have more assets, but I can completely imagine how for some they may not. As it is, when my grandmother dies and inheritance taxes apply there may not be enough money to cover the house and we'll have to sell it. There are memories in that house for three or four generations of people and we may not be able to keep it in the family. It's really sad, actually.

Even assuming that this is only passed to one person it doesn't even come close to hitting the estate taxes. How is this sad again?

 

[mre]

Even assuming that this is only passed to one person it doesn't even come close to hitting the estate taxes. How is this sad again?

The problem with estate planning is you can't predict when someone will die, or what the law will be when they die. The presumption is that Congress will act to extend or alter the estate tax, but, if they fail to do so, then the estate tax exemption will be back to $1m on January 1, 2013.

Edit: and the estate tax exemption isn't on an heir-by-heir basis, so 1 heir or 100 heirs, the amount of the estate tax levied will still be the same.

 

[Mammoth Jones]

Yea, fuck people that want to give their wealth to their children so they can live a better life!

When I die everything I worked hard (and paid taxes the entire time) for should go to people I don't know because obviously they need it!

 

[Zaraki_Kenpachi]

Is it? I thought the ceiling was $2M. If so, good news.

It's been steadily increasing since 2001. It's $5 mil this year, it defaults down to $1 mil which was the level in 2001 before the laws were changed. I'd be very surprised if it defaults all the way down to $1m and no new provision is put into effect.

Yea, fuck people that want to give their wealth to their children so they can live a better life!

When I die everything I worked hard (and paid taxes the entire time) for should go to people I don't know because obviously they need it!

This couldn't be a more ignorant post if you tried. Do you not pay for all other taxes when goods/money changes hand? Why not stand up to the big bully government for those also?