Originally Posted by direstraits:
Agreed, plus government over values cost of the land and assets, frequently. But, must settle for the actual amount if the farm is sold.
Best compromise would be a true inheritance tax -- only paid when the assets are sold by heirs., at least for farms, ranches and wholly owned businesses. For stock portfolios, I'm neutral.
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I'm asking because I think you'll know. Correct any of my misstatements. I'm just thinking out loud.
The value of the inheritance needs to be above a certain amount to be taxed.
Those who inherit above or below that amount and sell it may be subject to capital gains.
Am I close? Or did I oversimplify.
Thanks.
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Really not a tax specialist anymore, but can answer this question -- its a two parter.
If the total property value is over $5.43 million (amount goes up annually per an inflation factor) as of 2014, its taxed under the inheritance tax. If, one inherits a house originally purchased for $150,000 and sells it immediately for $200,000 there is no tax. If, one holds onto the home for years, then sells it for $300,000; then there is a capital gains tax on the additional $100,000.
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Thanks. I was thinking along the lines of your example of a home. Such as if a person inherits a $100k home and hangs on it thinking it might be an investment, the longer one does, the greater the capital gains and that plus the property taxes paid in the meantime might negate whatever increase in value it might have.
A tax on tax?
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Even the rather liberal Beatles had no love for the taxman once they made enough to be taxed at a higher level by the US and UK, hence their Taxman (I'll tax the pennies on your eyes).