In that case, the estates of B and C would probably disclaim ownership of the property.
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Couple inherits art it can't sell, IRS says it owes $29M in death taxes
- Thread starter Kosmo
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In that case, the estates of B and C would probably disclaim ownership of the property.
Exactly, and why should we have rules in place to prevent the rich from trading non taxable gifts back and forth in lieu of taxable payments?
Yes, if you're receiving money from her 401k or other income that she never paid income tax on, then, yes, you're getting taxed. But it's not an inheritance or estate tax in your case.
Care to educate us?
The Technomancer
card-carrying scientician
Right, the problem with the idea of a "one way gift" is that when you open yourself up to that then every transaction can be painted as a pair of one-way gifts that just happened between the same people.
I do not think that the black market is the market in which legally owned artwork is commonly sold to the public.
My family owns farm land and I can safely say that you don't know what the fuck you're talking about.
Overly simplified using the $5m cutoff and a 50% rate:
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Person A leaves Person B $100m, the first $5m isn't subject to estate tax, so Person B gets $5m + 50% of 95m = $52.5m (taxes paid $47.5m)
Person B leaves Person C $52.5m, the first $5m isn't subject to estate tax, so Person C gets $5m + 50% of 47.5m = $28.75m (taxes paid $23.75m)
Person C leaves Person D $28.75m, the first $5m isn't subject to estate tax, so Person D gets $5m + 50% of $23.75m = $16.875m (taxes paid $11.875m)
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Total taxes paid = $83.125m on the original value of $100m; Total taxes will never exceed the original value of the estate no matter how many generations die. As the estate value approaches $5m, estate taxes approach $0.
Not really, but in simple terms, value is just that, what something is worth.
Liquidity is how fast and easily you can turn the asset into said value.
The piece in question has substantial value but isnt liquid at all.
But when you consider the black market is the only market the public could "commonly" attain this rare piece of art...
This is essentially what happened to me. When my grandmother passed away all the farmland was split up for the grandkids. Each of us got 140 or so acres, which if we could have rented it would have been about 30 grand a year. And I would have gladly accepted paying taxes on that to help jumpstart my retirement savings. Instead, thanks to estate taxes and being cash poor, I ended up selling it all off for way less than it was valued at in the scramble to pay the taxes before I got hit with late penalties. All my cousins had to do the same, so in the end none of us got anything.
Fucked?
Lol, no.
The point is to prevent dynastical wealth, not to punish people for having rich parents. You'll inherit millions worth of stuff, and sell off a large chunk of it to pay the taxes on it. You'll be left with lots of money from liquidating your assets. But not as much as your parents had.
And that's how it should be. Otherwise, your family could live off of your parents for generations (and some families can do that for a few generations, if their estates are 9 figures or greater)
Zoe
Member
The eagle isn't a painting.
les papillons sexuels
Banned
take out insurance first.
Zoe
Member
Bald eagle, to be exact. AKA the national bird of the US.
AgentP
Thinks mods influence posters politics. Promoted to QAnon Editor.
So the taxes on the property equaled amount you sold it for? Somehow I doubt it.
This. Woe is them, I'm sure.
People have been arguing about whether it's 1,3, or 5. It shouldn't affect me at all of it's 5, I was commenting on the assumption that if Congress it goes back down.
When I'm referring to parents in this thread, I'm talking about dad and stepmom. My mother was the one who claimed she wasn't rich.
No one's arguing about the number. The number is $5m, for now. What the number will be in 2013 and beyond is unknown.
JzeroT1437
Member
How will they get by?
I never asked for anything resembling your sympathy.
To be fair, there was a bit of Karma involved as my great grandfather had swindled most of the land out of several families during the depression. So when it came time for us to sell, all the other local farming families made sure we paid for it since they were the only ones that showed up to bid on the land.
Could you just take a loan against the land to pay for the tax? I am no financial expert or anything, but that's the first thing came to my mind.
:O so does mine! So I can safely say I do know what I'm talking about
You got majorly screwed on that land price then because it shouldnt have even been close to being that bad. Should should have mortgaged the property and used the rent income to pay it.
diffusionx
Gold Member
V = total value
pV = tax bill.
grandparent gets (1-p)V
parent gets (1-p)^2*V (this assumes the total value is reduced by the tax bill).
Government gets: pV and 1-(1-p)^2*V. Add it up and it is (3p+p^2)*V.
If 3p+p^2 > 1, then the government gets more than the bill is worth. So solve the quadratic and you get 262% or 39%. It is possible, but that's with no deductions. It took me way longer to solve that than it should have, jeez.
MightyHealthy
Banned
I agree 100%
Skimmed through this thread and I saw what I expected. It's great when topics about finances/taxes come up and see the thoughts that people have on the subject (I end up getting good laughs). I hope that at least when they are reading, they are actually learning something rather than continuing to carry false information.
And lol at the "death" tax terminology.
Anyways, it's so stupid how the IRS can pull stuff out of their ass and try to get what they want even if they case they're making makes no sense or it blatantly contradicts the IRC or a relevant revenue ruling. Never change IRS, lol.
And lol at the "death" tax terminology.
Anyways, it's so stupid how the IRS can pull stuff out of their ass and try to get what they want even if they case they're making makes no sense or it blatantly contradicts the IRC or a relevant revenue ruling. Never change IRS, lol.
GungHo
Single-handedly caused Exxon-Mobil to sue FOX, start World War 3
It's done to prevent an infinite perpetuation of wealth, free of tax, that exists independent of economically beneficial action.
In this case, TR would have shot the eagle himself.
TransTrender
Gold Member
Complaining about taxes when you inherit $1 billion is a shitty thing to do.
diffusionx
Gold Member
Got a bit more complicated, huh? I saw you pre edit
Yes, it was a disaster. End of the day brain farts.
No worries, that's why I asked the question. It was non obvious to me what the answer was.
Not when the IRS is not following its own legal policies.
:lol
shadowsdarknes
Member
These people have no problem paying their taxes. And while they are still multimillionaires even if they lose their case in court, 40.9 million dollars isn't an amount you willingly hand over unfairly to a false valuation based on an illegal action that you have yet committed.
I can't believe the majority in this thread are in favor of allotting more power to the already mighty IRS who loves fucking over hardworking citizens who have long forgotten about mistakenly misreporting their taxes 10 years ago when they were working a shit job at Denny's.
Unbelievable.
I can't believe the majority in this thread are in favor of allotting more power to the already mighty IRS who loves fucking over hardworking citizens who have long forgotten about mistakenly misreporting their taxes 10 years ago when they were working a shit job at Denny's.
Unbelievable.
speculawyer
Member
The estate tax cracks me up. It can largely be avoided with good estate planning (just ask Mitt Romney). And less than 2% of the population will ever be subjected to it yet amazingly wealthy people are able to get idiots like Kosmos to feel sorry for them. LOL.
OP framed it as about whether estate taxes are fair rather than about the IRS making a stupid ruling. And so the argument followed that path.
So it goes.
speculawyer
Member
So in other words, you want your taxes raised. Because that money has to come from somewhere, right? If you let rich people off the hook that means you need to pay more. Please write a letter your Congressperson asking that your taxes be raised to help the poor rich people.
speculawyer
Member
When you are going to lie, at least try to make up a lie that isn't easily disproven by the statute of limitations.
Unbelievable . . . literally.
shadowsdarknes
Member
I think it goes hand in hand. I believe the Estate Tax is fair given the IRS makes fair rulings.
Dreamgazer
Member
I'm a tax auditor, so here's my 2 cents on this:
Yes, we pull stuff totally bogus stuff/bills all of the time.
Why do we do this?
Cause either
1)Taxpayer doesn't want to give us any records, so I'm allowed to assume anything I want (ex: "You got nothing? I'll assume your entire tax return is wrong then.) or
2)Taxpayer doesn't agree to our assessments but have no evidence to disprove it. (in this case, the couple refuses to pay the original $17M assessment, probably with no good legal argument against it. That or the regulations are up to interpretation, which means it should be closed sooner and let it go to court anyway)
Obviously we can't go to our supervisor and say "Ok, I can't get anything out of them, so let's assess them with a $0 bill." If that's all we do all day, then every taxpayer/corporation will just do that and get themselves off the hook.
So in those cases we are either forced to:
1)Come to a compromise with the taxpayer (bad for everyone)
2)Force a big assessment based on the wildest assumption, to hope that taxpayers will comply/give records/ try to work with us.
3)Force a big assessment down, wait for the taxpayer to protest and hopefully give us something to prove someone wrong.
4)Force something down so the case can be closed sooner and just go to court and have them figure it out.
The last thing you want is some case staying open forever wasting everyone's money on a he-said/she-said battle.
P.S. It's not our problem if people do decide to pay the assessment (same as people who don't fight their speeding tickets.) However, we are always willing to work with taxpayers. Not like the person working on the case is going to get a single cent.
It's the CPA/Lawyers/Middle man that are often the ones that screws up everything to just drag a case on forever.
shadowsdarknes
Member
Whatever the situation is, the language is not clearly defined and subjected to broad judicial discretion.
speculawyer
Member
You lied and got caught. But dont' fess up to it . . . just start with more bullshit.
Yeah, as if we don't have thousands of pages of tax code, thousands of judicial rulings on the tax code, and competent judicial branch where you can argue your case up to the supreme court. Nah . . . just whine that the gubmint' iz teh evil.
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