inheritance tax?

[dowxp]

Hi, my coworker has inherited about 90k. but hasn't recieved the money yet. would this be taxed?

if i'm reading correctly,

http://law.freeadvice.com/tax_...ation_skipping_tax.htm

"no tax is incurred on the first $1.5 going to grandchildren and those deemed to be two or more generations below that of the transferor"

>_>; does this mean he won't have pay taxes even though it is "income" ?

thanks

 

[FoBoT]

might try posting in the annual tax thread also
it shouldn't be taxed, but i am not a real tax guy

 

[vrbaba]

Originally posted by: dowxp
Hi, my coworker has inherited about 90k. but hasn't recieved the money yet. would this be taxed?

if i'm reading correctly,

http://law.freeadvice.com/tax_...ation_skipping_tax.htm

"no tax is incurred on the first $1.5 going to grandchildren and those deemed to be two or more generations below that of the transferor"

>_>; does this mean he won't have pay taxes even though it is "income" ?

thanks

Err..

From what I read, tax WILL be charged for two or more generations down. Only parents to children transfer is not taxed.

So technically, yes, it would be a 55% tax on it.

EDIT: On second look, seems like that generation skipping was only for 2004.

 

[IceBergSLiM]

Inheritance tax is ludicrous.

 

[vrbaba]

Originally posted by: IcebergSlim
Inheritance tax is ludicrous.

Yes.

There is much debate on it currently. According to OP's link, they will be revising it in 2010 maybe. Its almost unconstitutional and morally wrong to tax something like that... and to tax something like that so steeply.

 

[IceBergSLiM]

Originally posted by: vrbaba

Originally posted by: IcebergSlim
Inheritance tax is ludicrous.

Yes.

There is much debate on it currently. According to OP's link, they will be revising it in 2010 maybe. Its almost unconstitutional and morally wrong to tax something like that... and to tax something like that so steeply.

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

 

[mugs]

Did you miss the $1.5 million exemption part? Inheritance tax is targeted at the rich.

 

[GuitarDaddy]

Originally posted by: vrbaba

Originally posted by: dowxp
Hi, my coworker has inherited about 90k. but hasn't recieved the money yet. would this be taxed?

if i'm reading correctly,

http://law.freeadvice.com/tax_...ation_skipping_tax.htm

"no tax is incurred on the first $1.5 going to grandchildren and those deemed to be two or more generations below that of the transferor"

>_>; does this mean he won't have pay taxes even though it is "income" ?

thanks

Err..

From what I read, tax WILL be charged for two or more generations down. Only parents to children transfer is not taxed.

So technically, yes, it would be a 55% tax on it.

EDIT: On second look, seems like that generation skipping was only for 2004.

Err... you need to read better

from the article

"In addition, every individual is allowed a $1.5 million generation skipping exemption in 2004 (in years thereafter, the current estate tax exemption level applies). Thus, no tax is incurred on the first $1.5 going to grandchildren and those deemed to be two or more generations below that of the transferor."


And the 2007 exemption amount is $2mil.

OP I can say with 100% certainty that your friend will owe no federal inheritance or GST "generation skipping tax"

<<<Old Accountant with 30+ years experience in these matters

 

[ViviTheMage]

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

that makes a bit more sense imo.

 

[everman]

You are not taxed on inherited money, there is no "inheritance tax". There are however estate taxes which the decedent's estate is required to pay. Right now the exemption is $2million, which means a person can pass on that much without paying estate taxes.

 

[GuitarDaddy]

Originally posted by: IcebergSlim

Originally posted by: vrbaba

Originally posted by: IcebergSlim
Inheritance tax is ludicrous.

Yes.

There is much debate on it currently. According to OP's link, they will be revising it in 2010 maybe. Its almost unconstitutional and morally wrong to tax something like that... and to tax something like that so steeply.

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

I have always been strongly against inheritence tax, but interestingly enough many of the worlds wealthiest people (Warren Buffet, among others) support the tax. Their reasoning is wealth should be earned, not inherited. And they beleive that abolishing the estate tax would create family dynasties, putting an inordinate amount of wealth in the hands of spoiled incompentent greedy boobs. If I really think about it unselfishly this makes sense, honestly the current exemption of 2mil should be enough to take care of your loved ones.

And a smart rich man will leave his heirs the tools to accumulate their own wealth, ie.... viable, profitable business(es) and the education, drive and savvy to manage and maintain them.

"Give a man a fish, and he can feed his family today. Teach the man how to fish and he can feed his family for a lifetime"

 

[Pugnax]

This is why you should set up a trust.

 

[IceBergSLiM]

Originally posted by: GuitarDaddy

Originally posted by: IcebergSlim

Originally posted by: vrbaba

Originally posted by: IcebergSlim
Inheritance tax is ludicrous.

Yes.

There is much debate on it currently. According to OP's link, they will be revising it in 2010 maybe. Its almost unconstitutional and morally wrong to tax something like that... and to tax something like that so steeply.

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

I have always been strongly against inheritence tax, but interestingly enough many of the worlds wealthiest people (Warren Buffet, among others) support the tax. Their reasoning is wealth should be earned, not inherited. And they beleive that abolishing the estate tax would create family dynasties, putting an inordinate amount of wealth in the hands of spoiled incompentent greedy boobs. If I really think about it unselfishly this makes sense, honestly the current exemption of 2mil should be enough to take care of your loved ones.

And a smart rich man will leave his heirs the tools to accumulate their own wealth, ie.... viable, profitable business(es) and the education, drive and savvy to manage and maintain them.

"Give a man a fish, and he can feed his family today. Teach the man how to fish and he can feed his family for a lifetime"

That is a nonsense quote from buffet.

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

2) Wealthy people know how to protect there wealth anyways(trusts, offshore, businesses) so this tax doesn't do much for them

3) While you should earn money, no one should tell you what to do with money you have earned.

 

[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.

 

[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.

 

[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.

 

[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.

 

[dainthomas]

Originally posted by: IcebergSlim

Originally posted by: vrbaba

Originally posted by: IcebergSlim
Inheritance tax is ludicrous.

Yes.

There is much debate on it currently. According to OP's link, they will be revising it in 2010 maybe. Its almost unconstitutional and morally wrong to tax something like that... and to tax something like that so steeply.

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

What's the problem? Sales taxes are also "double taxes". So are property taxes, assuming the money you earned to buy the property was taxed.

The purpose of the inheritance tax is to prevent the establishment of a defacto nobility. Of course the dramatic movement of wealth toward the upper class shows how ineffective it's been for this purpose.

 

[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.

 

[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.

 

[Al Neri]

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.

Did someone just read Rich Dad Poor Dad?

 

[Al Neri]

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:

 

[IceBergSLiM]

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.

Fuck that. Who ever earned it has finally say what happens to it if they die. If the founding fathers wanted it that way it would have been written into the constitution.

 

[mfs378]

Originally posted by: IcebergSlim

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.

Fuck that. Who ever earned it has finally say what happens to it if they die. If the founding fathers wanted it that way it would have been written into the constitution.

Why do I have to die before I can do what I want with my money? Why can't I gift it away tax-free now?

 

[OutHouse]

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.