Hi Marc - Both you facts and your nomenclature are in error in points 1, 2 and 3... and that's first on my list! Eric Goldstein -- On Wed, Dec 2, 2009 at 10:37 PM, Marc James Small <marcsmall@xxxxxxxxxxx> wrote: > At 08:12 PM 12/2/2009, Eric Goldstein wrote: >>Hi Austin - >> >>Then for the benefit of the rest of our readers who are likely not so >>conversant in US Estate Law, let's get accurate information out there. >>The tax to which you refer only effects the very wealthiest of all >>Americans, the top 3-4% I would guess. The US tax structure is >>basically a progressive one, and those who are able to pay more are >>generally called upon to do so with their income tax, property tax, >>and estate tax. At least that the law intends. > > First, there are State and Federal estate taxes. Most, but not all, States > seem to have abolished their death taxes. The Federal government currently > exempts estates worth $800,000 or so. > > Second, there are estate taxes and estate income taxes. During the period > from death until distribution, an estate must pay income taxes on any > profits made by the estate. > > Third, the real problem is in illiquid assets such as farms and businesses. > That is, a man may die owning, say, a barbershop. His annual income has > been $50,000 a year. But, in the eyes of the IRS, his business may be worth > a million dollars due to the good-will, annual gross income (they generally > value a business at three times annual gross), and the enhanced value of the > building in which the storefront shop is located. So, the dead man's son is > suddenly told, "cough up $340,000 to keep the business alive". (There are > workarounds, incidentally: many commercial insurance firms sell policies > specifically designed to pay off tax charges such as these.) > > Marc > > > msmall@xxxxxxxxxxxx > Cha robh bàs fir gun ghràs fir! > > --- > Rollei List > > - Post to rollei_list@xxxxxxxxxxxxx > > - Subscribe at rollei_list-request@xxxxxxxxxxxxx with 'subscribe' in the > subject field OR by logging into www.freelists.org > > - Unsubscribe at rollei_list-request@xxxxxxxxxxxxx with 'unsubscribe' in the > subject field OR by logging into www.freelists.org > > - Online, searchable archives are available at > //www.freelists.org/archives/rollei_list > > --- Rollei List - Post to rollei_list@xxxxxxxxxxxxx - Subscribe at rollei_list-request@xxxxxxxxxxxxx with 'subscribe' in the subject field OR by logging into www.freelists.org - Unsubscribe at rollei_list-request@xxxxxxxxxxxxx with 'unsubscribe' in the subject field OR by logging into www.freelists.org - Online, searchable archives are available at //www.freelists.org/archives/rollei_list