Originally Posted by curtis catman
How about inheritance tax, This one really gets me. My dad worked his hole life to get where he is. Paid tax on every dollar he made. Then he dies and the FED gets tax again on all of it. Some kids can not afford to pay this so the FED takes the property. I hope one day I am diagnosed with some terminal illness. I will sell every thing to my child for one dollar. Then uncle sam can get his 25 cents. At age seventy if I am still alive I will sell every thing to my child anyway for a buck. If people started doing this that would cut into federal spending and it is legal. These are just some of my ideas. Take em for what they are worth.
An inheritance tax is where an individual is taxed on what they inherited.
An Estate Tax is where the Estate is taxed prior to any disbursement.
(The federal government does not
have an inheritance tax.
The eight states that do have an inheritance tax are east of the Mississippi except Nebraska.)
The Federal Government has Estate Taxes that only start after a million dollar threshold. (In recent years it is higher. As of 2014, the exclusion was $5.34 million. A $5.43 million exclusion in 2015. If the total value of the estate in question exceeded this amount, the estate itself would potentially be subject to an estate tax.)
Because of this threshold, only about 2 percent of taxpayers will pay a federal estate tax.
This can be avoided by simple planning such as setting up Trusts for children.
For larger estates this is really important because the estate tax carries a maximum rate of 40 percent.