Someone hasn't read the thread very well.
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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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Someone hasn't read the thread very well.
Which brings me back to my point. The problem here isn't the estate tax law, it's the law that says you can legally own this thing, but you cannot legally sell it. That's where things get hairy to me. With their waiver saying it was made before the ban, it should be able to be sold, in my opinion.
My understanding is most of the benefit I could get is going to get absorbed in taxes. It's certainly not a horrible situation.
I don't know. I think dad has stocks but that's it.
This post + the avatar + user name made this post far more hilarious than I think it was intended.
Dreams-Visions
Member
how can value be assigned to an item that cannot be sold?
implicit in the concept of "value" is ability to sell it for said amount.
implicit in the concept of "value" is ability to sell it for said amount.
Isn't most of your understanding coming from your parents? And, correct me if I'm wrong, but I remember another thread where you talked about them and they claimed to not be rich at all (even though they very much are), and everyone thought it was pretty ridiculous back then too.
Not necessarily. If they were to set up a museum wherein people payed money to see the artwork in said museum would you still contend this piece has no value at all? In such a scenario it would generate profit by being an attraction. It could potentially have great value in such a case.
Mammoth Jones
Member
I did. Was just irked by the "fuck rich people!" tripe.
Zaraki_Kenpachi
Member
Where? Where does it say most? When the TOP tax rate is 35% and the estate would have to be over $5mil? You seem to just be spouting nonsense that isn't even true for pages now.
And you respond to it by spouting ignorant bullshit? Ok...
The Technomancer
card-carrying scientician
Your reply wasn't much better. If you decided to give a $10 million home to a friend of yours should that transaction be taxed?
That's not how the tax law calculates value of personal property.
Jason's Ultimatum
Member
The sad thing is that Republicans and the rich makes the poor and middle class believe it'll effect them, too.
In fairness, rich people are the worst.
My GF's grandma, who is middle of the road dem, was bitching to me about the death taxes. She worked at a factory for 50 years. No one is taking her money. But that they *think* they will is all that matters.
Well you certainly wrote a convincing rebuttal!
Callo Merlose
Banned
Remove the bird from the sculpture, sell the art, then donate the bird afterwards. Best shot. Or sell it overseas.
Whoa, don't jump to conclusions. It could also have been Ripclawe.
SouthernDragon
Member
1) As has been stated, but requires more emphasis: Estate tax. Not a death tax. The intent is to try and prevent an accumulation of wealth and power in a few families.
2) Money is taxed multiple times, every time there's a transaction. Taxation happens when you are given a paycheck. It then happens again when you buy something. It then happens again when that money is used to buy supplies. Again when it's reinvested into manufacturing equipment or employees. And so on.
2) Money is taxed multiple times, every time there's a transaction. Taxation happens when you are given a paycheck. It then happens again when you buy something. It then happens again when that money is used to buy supplies. Again when it's reinvested into manufacturing equipment or employees. And so on.
Mammoth Jones
Member
Or it could be....someone on the internet has a different opinion than you.
Sorry about that.
nVidiot_Whore
Banned
Just to be clear.. if you "inherent" money, of any amount, you are taxed on that money. It's basically income.
The "estate tax" is a separate tax. It is levied first, if it applies, and the "estate" pays the tax. It's where "death tax" comes from, because, in a way.. the dead person IS paying the taxes.
If you think you aren't going to pay taxes on the Money your Grandma leaves you because it is under some threshold, I believe you are just wrong.
The "estate tax" is a separate tax. It is levied first, if it applies, and the "estate" pays the tax. It's where "death tax" comes from, because, in a way.. the dead person IS paying the taxes.
If you think you aren't going to pay taxes on the Money your Grandma leaves you because it is under some threshold, I believe you are just wrong.
Re: property estate tax.
In the U.S., if someone passes away and their property goes to someone else, the person inherriting that property pays full value on that property? That means if, by poor chance, 2-3 owners of a piece of property were to die in a short span, the IRS would end up collecting more taxes than the property is worth? Is this right?
If so, I prefer Canada's stance on this: when you inherrit a piece of property, you only pay taxes on the capital gains since the property was purchased or last transfered ownership. Also, I believe we do not pay taxes if the property being inherrited was a primary residence.
In the U.S., if someone passes away and their property goes to someone else, the person inherriting that property pays full value on that property? That means if, by poor chance, 2-3 owners of a piece of property were to die in a short span, the IRS would end up collecting more taxes than the property is worth? Is this right?
If so, I prefer Canada's stance on this: when you inherrit a piece of property, you only pay taxes on the capital gains since the property was purchased or last transfered ownership. Also, I believe we do not pay taxes if the property being inherrited was a primary residence.
SouthernDragon
Member
If I'm not mistaken, gifts under a certain amount are not taxed, and estate taxes don't kick in until the inheritance passes 5 million dollars.
5 million fuckin' dollars. Goddamn.
metalslimer
Member
Haha I knew it would be Kosmo
Interesting conundrum, I have no idea how that is handled.
nVidiot_Whore
Banned
The gift amount is something like $12k per person. And a dead person can't give a "gift."
But again.
ESTATE TAX is paid by the state.
If your Grandma leaves you $4 million... you still pay taxes on that $4 million.
If 3 equal owners of a property pass at the same time, then each would only include 1/3 of the value of the property in their respective estate.
Estate tax is only assessed if the total value of the estate goes over a certain threshold. For this year it is $5m. When you inherit a specific piece of personal property, you receive a basis in that property equal to its FMV, valued at the date the decedent passed. If you later sold that property, then you would be assessed a tax based upon the income you received greater than that basis. Whether it's capital gains or ordinary income depends upon other factors.
There might be some individual states that do this, but the US doesn't.
nVidiot_Whore
Banned
Huh? No. If 2-3 people owned a piece of property, their "estate" would only own a percentage of the value of said property.
There is no scenario where you'd end up paying more taxes than something is worth.
Splitting the property between 2-3 people can help ensure no Estate tax is levied in the first place.. because no single entity actually holds the entire value.
Some states have estate taxes, most do not.
Beerman462
Member
Taxi Driver for president.
So IRS says 15mil based on what..who knows? Couple refuses to pay. IRS expert panel says 65 mil. Seems high, but I'm not an expert. The fact that they can't sell it isn't a qualifier to call it worthless either. Especially since it is currently insured by the museum for an amount they wont or can't disclose. If I was the judge on this case I would rule that they don't have to pay taxes as long as they give up all possession of the piece.
Estate Tax in general I feel is very fair especially at the level it currently stands. Like travisbickle said if you didn't work hard enough to pay the taxes on mommy and daddy's 1mil plus estate then I guess you have to sell it to pay. You still come out ahead monitarily. The farm argument is great at tugging at heart strings. I would rather think about the Hilton's and Johnson and Johnson family paying.
nVidiot_Whore
Banned
My Mom just died.
She wasn't worth anywhere near millions of dollars.
I've had to fill out tax forms, federal ones, on some of the money I've inherited. Any amount greater than $20k or something you are expected to pay estimated taxes on ahead of time.
It will ALL be taxed though.
No, I mean if:
Person A owns the property, passes away, leaves it to Person B
Person B owns the property, passes away, leaves it to Person C
Percon C owns the property, passes away...
within a short span of time.
Would the taxes be paid based on the full value of the property each time?
nVidiot_Whore
Banned
I meant estate. Not state.
Totally confusing typo.
But this thread is REALLY confused.
Inheritance tax is separate from estate tax.
Not all estates are taxed, certainly not at the same rate.
Inheritance is almost ALWAYS taxed.. unless you have enough write-offs or credits, either way, it is reported as taxable income of sorts.
edit: I've pretty much been proven wrong, so this comment can go ignored. Sorry for the confusion.
You need to talk to a tax attorney ASAP, buecause that is not correct. If you're using one, get a new one.
Yes, it's called disclaimer.
nVidiot_Whore
Banned
Oh.. Well.. I don't know. But theoretically each instance of inheritance will cause the "estate" to be negated by the taxable amount.
So person B's estate would have to rectify the taxes they owe.
Making their estate worth less.
Karsticles
Member
It shouldn't be taxed if it's a one-way gift. If my father wants to give me his old car, he should be able to without any of us paying anything to the government. If I want to give you my old car, I should be able to without either of us paying anything to the government. Taxing postmortem gifts is deplorable.
nVidiot_Whore
Banned
Perhaps it's because I'm inheriting tax sheltered money then?
I'm not confident in my overall statements, but I'm 100% confident that I am not being duped into paying taxes I'm not supposed to. This was done w/ lawyers, and under advisement from the same financial people my Mom was paying to manage her money.
Sorry if I'm just adding to the confusion..
Damn, I'm sorry to hear that.
I'm not a tax expert, but that really doesn't sound right. IIRC, you might have to pay taxes on things like pensions or IRAs that would've been income to her. But assets should not be taxable. Again, not an expert, but I'd suggest you consult one.
Edit:
Gotcha. Yes, it's almost certainly because it was tax-sheltered.
No, because the taxes owned by each person would reduce the total size of the inherited estate.
Angry Grimace
Two cannibals are eating a clown. One turns to the other and says "does something taste funny to you?"
If it cant' be sold, it's fair market value is 0.
nVidiot_Whore
Banned
Yeah I'm probably just getting confused because at this point what has been received has probably all been from cashed out IRA's.
We have yet to sell her house or receive any direct cash.
edit: And thanks for the condolences.. it's been 6 months of endless paperwork even for a small estate, so I'm pretty detached emotionally when discussing this morbid topic of inheritance at this point.
balladofwindfishes
Member
this isn't about its market value
Once again, there is no tax on gifts under a certain amount ($13,000) per year, and over that amount you're giving big enough gifts that you can afford to give the IRS a little gift as well.
SouthernDragon
Member
Actually, there's a Federal Estate tax that is generally applicable across all 50 states, with some exceptions. Let's see...
Indiana: The spouse of a decedent is 100% exempt from paying inheritance tax. Parents, children,grandparents,grandchildren,and other lineal ancestors and lineal descendants of the decedent,as of July 1, 2012, are exempt from taxation on the first $250,000 of inheritance. Tax is on a sliding scale that starts at 1% to 10% of the net inheritance of each individual. More information may be obtained by referring to IH-6, Indiana's inheritance tax instructions.
Iowa: Inheritance is exempt if passed to a surviving spouse, parents, or grandparents, or to children, grandchildren,or other "lineal" descendants. Other recipients are subject to inheritance tax, with rates varying depending on the relationship of the recipient to the deceased.[14]
Kentucky: The inheritance tax is a tax on a beneficiary's right to receive property from a decedent's estate. It is imposed as a percentage of the amount transferred to the beneficiary. Transfers to "Class A" relatives (spouses, parents, children, grandchildren, and siblings) are exempt. Transfers to "Class B" relatives (nieces, nephews, daughters-in-law, sons-in-law, aunts, uncles, and great-grandchildren) are taxable. Transfers to "Class C" recipients (all other persons) are taxable at a higher rate.[15] Kentucky imposes an estate tax in addition to its inheritance tax.[15]
Pennsylvania: Inheritance tax is a flat tax on the value of the decedent's taxable estate as of the date of death, less allowable funeral and administrative expenses and debts of the decedent. Pennsylvania does not allow the six month after date of death alternate valuation method that is available at the federal level. Transfers to spouses exempt. Transfers to grandparents, parents, or lineal descendants are taxed at 4.5%. Transfers to siblings are taxed at 12%. Transfers to any other persons are taxed at 15%. Some assets are exempted, including life insurance proceeds. The inheritance tax is imposed on both residents and nonresidents who owned real estate and tangible personal property in Pennsylvania at the time of their death. The Pennsylvania Inheritance Tax Return (Form Rev-1500) must be filed within nine (9) months of the date of death.[16]
Utah: abolished inheritance tax in 2005.[13]
New Hampshire: abolished state inheritance tax in 2003; abolished surcharge on Federal estate tax in 2005.[9]
Louisiana: abolished inheritance tax in 2008, for deaths occurring on or after 1 July 2004.[8]
That's just a quick and dirty look at Wikipedia. Looks like quite a few individual states either don't have it at all, make it so that direct descendants don't pay taxes or the cap is quite high.
Soooooo
EDIT:
Looks like I wasted my time!
What if each person paid the taxes in full before they passed away?
It violates it because if estate were to go from parent to child, they likely would not charge them for it.
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