[rollei_list] Re: OT Estate Tax (was Re: Copyright Law)

  • From: Eric Goldstein <egoldste@xxxxxxxxx>
  • To: rollei_list@xxxxxxxxxxxxx
  • Date: Wed, 2 Dec 2009 22:50:47 -0500

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!
>
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