Senate Democrats vote down minimum wage increase...

[Chuck S]

But there are also ways around estate taxes for the bulk of wealthy Americans...and the estate tax would only be aplied to a small portion of their actual assets. For instance, you could set up a false corporation...corporations do not die when you die, they continue to live, thus, if prior to your death, your assests were all controlled by a corp, and your "heirs" were majority stockholders of that corp, but a small percentage of that corps stock was in your name, then the estate tax would be apllied only to the portion of stock you owned. There have always been legal ways around the bulk of estate taxes for those that choose to use them.

 

[Charade]

Just as a nitpicky point, there is no tax on the capital gains for your house as it grows in value. The estate tax would be the first tax on the gain, not "another".

Only if it's sold. The fair market value is included in the gross estate.

 

[Chuck S]

The IRS doesn't care how the wealth was created. Income, real estate, investments, etc. If I saved $1000 a month after taxes for the 40 years I worked, that would be taxed again because it's part of my estate. So in fact, the "hard earned" money would be taxed again.

They take all of that into account to figure the net worth of your estate. If it's above the threshold, you (your estate) have to pay taxes on it. So if you bought a house 30 years ago and it's paid off, the house will be assesed another tax after your death. That's just wrong.

My point was that in an earlier post, you said people were losing their "hard earned money", when in fact, they are not, they are dead, they no longer care. The heirs (other than a spouse) have done nothing to save or "earn" that money. In a way, it is a "windfall profits" tax to the heirs...again, unless the heir is a surviving spouse.

 

[DVC Sadie]

maybe you worked your way up from being dirt poor, and you worked your fingers to the bones to get through college. you did it on your own, and now that you have realized the american dream, you just want to hold onto the money that you worked so hard to earn.

Thank you for stating the above.
We worked very hard and all I see when we die is our estate going to people who could have chosen to work hard too. Instead of our money that we already paid tax on while we earned it, spent it, and now will have to pay a death tax on it, why can't we get to choose which charity we want to give it to, instead of having the government spend it on the charity it thinks it should go to.

 

[Chuck S]

Thank you for stating the above.
We worked very hard and all I see when we die is our estate going to people who could have chosen to work hard too. Instead of our money that we already paid tax on while we earned it, spent it, and now will have to pay a death tax on it, why can't we get to choose which charity we want to give it to, instead of having the government spend it on the charity it thinks it should go to.

If you wish to leave the bulk of your estate to charity, there are certainly ways to set that up to avoid most of the estate taxes.

 

[Charade]

it, why can't we get to choose which charity we want to give it to, instead of having the government spend it on the charity it thinks it should go to.

You can. If you do proper planning like Warren Buffet and Bill Gates did. Although Warren Buffet doesn't think the estate tax shouldn't be scrapped, he's doing as much as he can to avoid it.

 

[salmoneous]

why can't we get to choose which charity we want to give it to, i

If you leave your estate to charity, there is no estate tax on it.

 

[Charade]

If you leave your estate to charity, there is no estate tax on it.

So the choices are, leave it to charity or leave it to your heirs and have the government take (again) a big chunk of it.

 

[DVC Sadie]

If you leave your estate to charity, there is no estate tax on it.

We have already set up charitable trusts but do want to leave a lot of our estate to family without a huge tax bill, or have them have to sell in order to keep some of the estate. I should have explained it differently.

I guess what gets me is that we already paid a lot of the taxes on the income so why should the government benefit when we die? Why does the government seem to think that it is owed to them?

 

[DVC Sadie]

Here's a calculator based on 2004 tax law on how much estate tax you would owe (I calcuated using my parent's net worth) - $0 owed (and their net worth is above the top 2% threshold).

http://www.ombwatch.org/article/articleview/2126/1/119?TopicID=1

And now theoretically, the exemptions are higher. I believe it's up to 2.5 million.

Thanks for the link. I thought the total exemptions was 2 million this year. I don't plan on dieing for another 30 years so I guess we'll just have to wait and see what is going to happen by then

 

[Laugh O. Grams]

Has anyone looked into the benefits of leaving your estate, in small monetary gifts, to your heirs before you die?

 

[NewJersey]

Thanks for the link. I thought the total exemptions was 2 million this year. I don't plan on dieing for another 30 years so I guess we'll just have to wait and see what is going to happen by then

You're right. My mistake. It's 2 million this year.

A better calculator below and the article says some steps you can take to reduce the possibility of paying the tax.

http://www.smartmoney.com/tax/homefamily/index.cfm?story=estatetax

 

[DVC Sadie]

Has anyone looked into the benefits of leaving your estate, in small monetary gifts, to your heirs before you die?

Yes, this years untaxable limits are 12,000.00. The biggest problem with handing out money to relatives is that they come to expect it every year. We would like to see our neices and nephews work and start saving for their future without having money handed to them year after year. Am I being mean, maybe, but we want all of them to have a great work ethic and to make something of themselves on their own. It is important for all people to learn to stand on their own, without expectations of inheritance.

 

[yeartolate]

I knew that was coming.

Apparently they are more concerned with the "rich" keeping more of their money than low income earners making more money.

I am not sure this is accurate.

I believe there were provisions with the minimum wage increase that could adversly affect many tipped employees. It is my understanding is that the tips would then go towards the mimimum wage. This could cut tipped workers wages substantially. I am not saying it is right or wrong - just that that alone has the potential of putting some hard working folks on public assistance or at the very least negatively impacting on families that a minimum wage increase was meant to protect.

 

[eclectics]

Has anyone looked into the benefits of leaving your estate, in small monetary gifts, to your heirs before you die?

You can "gift" up to $10,000 per heir, per year.

 

[ducklite]

Has anyone looked into the benefits of leaving your estate, in small monetary gifts, to your heirs before you die?

My mom has been doing this for years now. When she sold my great aunts home she gave each of us $10,000. Then when she sold her house she did the same thing. She's got two pensions, an annuity, and SS, and doesn't want to have a boatload of money in the bank incase something were to happen and she needs to go into a nursing home--because the government would just take it all.

She's got aneough actual income to have a comfortable life, and figures she'd rather have her kids get her money than the government.

Anne

 

[Gary M]

You can "gift" up to $10,000 per heir, per year.

Gifting. Beginning in 2003, you can give up to $11,000 to each individual or charitable organization in a year without paying gift taxes. (The recipient does not pay taxes on the yearly limit of $11,000.) There is no yearly limit for qualified educational expenses. Gifting lowers the value of your estate and distributes your wealth while you are living. Gifts made to charitable organizations may be tax-deductible, but gifts to your heirs are not tax-deductible.

Unified tax credit. The unified credit is a cumulative tax credit. If you give more than $11,000 to an individual or charitable in a year, taxes owed on amounts that exceed the $11,000 per-person limit are subtracted from your unified credit. To record gifts in excess of the yearly limit, complete IRS Form 709, which is the sister of Form 706. (Form 706 is for estate tax and Form 709 is for gift tax.)
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Wait until the war between Israel and the terrorist in Lebanon stops. Who do you think will be paying to bebuild these two countries. I would bet the good old USA. The government spending has to slow down, taxes are high enough.

I have read somewhere(can't seem to find it now) that super wealthy families like the Kennedy's pay little if any "death taxes" because their money is in tax havens off-shore. I can't state this as a fact, but it wouldn't surprise me.

 

[eclectics]

Gifting. Beginning in 2003, you can give up to $11,000 to each individual or charitable organization in a year without paying gift taxes. (The recipient does not pay taxes on the yearly limit of $11,000.) There is no yearly limit for qualified educational expenses. Gifting lowers the value of your estate and distributes your wealth while you are living. Gifts made to charitable organizations may be tax-deductible, but gifts to your heirs are not tax-deductible.

Unified tax credit. The unified credit is a cumulative tax credit. If you give more than $11,000 to an individual or charitable in a year, taxes owed on amounts that exceed the $11,000 per-person limit are subtracted from your unified credit. To record gifts in excess of the yearly limit, complete IRS Form 709, which is the sister of Form 706. (Form 706 is for estate tax and Form 709 is for gift tax.)
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Wait until the war between Israel and the terrorist in Lebanon stops. Who do you think will be paying to bebuild these two countries. I would bet the good old USA. The government spending has to slow down, taxes are high enough.

I have read somewhere(can't seem to find it now) that super wealthy families like the Kennedy's pay little if any "death taxes" because their money is in tax havens off-shore. I can't state this as a fact, but it wouldn't surprise me.

Thanks for the update. I wasn't aware it went up to 11.

 

[DVC Sadie]

Gifting. Beginning in 2003, you can give up to $11,000 to each individual or charitable organization in a year without paying gift taxes. (The recipient does not pay taxes on the yearly limit of $11,000.) There is no yearly limit for qualified educational expenses. Gifting lowers the value of your estate and distributes your wealth while you are living. Gifts made to charitable organizations may be tax-deductible, but gifts to your heirs are not tax-deductible.

Unified tax credit. The unified credit is a cumulative tax credit. If you give more than $11,000 to an individual or charitable in a year, taxes owed on amounts that exceed the $11,000 per-person limit are subtracted from your unified credit. To record gifts in excess of the yearly limit, complete IRS Form 709, which is the sister of Form 706. (Form 706 is for estate tax and Form 709 is for gift tax.)
-------------------------------------------------------------------------
Wait until the war between Israel and the terrorist in Lebanon stops. Who do you think will be paying to bebuild these two countries. I would bet the good old USA. The government spending has to slow down, taxes are high enough.

I have read somewhere(can't seem to find it now) that super wealthy families like the Kennedy's pay little if any "death taxes" because their money is in tax havens off-shore. I can't state this as a fact, but it wouldn't surprise me.

I'm sorry I thought it had gone up to 12,000.00. I knew it had gone up to the 11,000.00 benchmark because we have given that amount to MIL but for some reason I thought it was raised this year.

 

[Laugh O. Grams]

Yes, this years untaxable limits are 12,000.00. The biggest problem with handing out money to relatives is that they come to expect it every year. We would like to see our neices and nephews work and start saving for their future without having money handed to them year after year. Am I being mean, maybe, but we want all of them to have a great work ethic and to make something of themselves on their own. It is important for all people to learn to stand on their own, without expectations of inheritance.

It's too bad that your family members feel this way, as it would certainly releive your heirs of any undue tax burden. I would think that someone would have to be pretty presumpuous, not to mention, straight up disrespectful, to think that way.

My mom has been doing this for years now. When she sold my great aunts home she gave each of us $10,000. Then when she sold her house she did the same thing. She's got two pensions, an annuity, and SS, and doesn't want to have a boatload of money in the bank incase something were to happen and she needs to go into a nursing home--because the government would just take it all.

She's got aneough actual income to have a comfortable life, and figures she'd rather have her kids get her money than the government.

Anne

Plus, I figure, she gets to actually see her family enjoying their inheritance...I love the idea!