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 Post subject: Question
PostPosted: Sun Oct 08, 2006 1:33 pm 
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I hate to ask this, but have been in a heated debate about it.

On the 'Death Tax' (Estate Tax to us), what is the figure a person has to start paying taxes when they inherit wealth?

I have said eliminating this tax decreased revenue and it a boon to the wealthy. The person I am speking with said it is a drag on people with just a 'little bit' of money and should be eliminated.

Does anyone know what the figure is?

Sorry I am not good at doing research anymore--but would really appreciate your input on this.

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PostPosted: Sun Oct 08, 2006 1:43 pm 
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Maybe this will help, dori...

http://www.bankrate.com/brm/itax/Edit/b ... sic_3a.asp

Protect Your Estate From the Tax Man!

ESTATE AND GIFT TAX FAQ

by Mary Randolph & Denis Clifford


Will my estate have to pay taxes after I die?

It depends. The federal government imposes estate taxes at your death only if your property is worth more than a certain amount--$600,000 to $1 million, depending on the year of death. But there are a couple of important exceptions to the general rule. All property left to a spouse is exempt from the tax, as long as the spouse is a U.S. citizen. And estate taxes won't be assessed on any property you leave to a tax-exempt charity.

Year Exempt Amount
1998 $625,000
1999 $650,000
2000,2001 $675,000
2002,2003 $700,000
2004 $850,000
2005 $950,000
2006 and after $1 million

Important new rules also apply to family-owned businesses and farms. Beginning in 1998, they receive a special $1.3 million exclusion from estate tax. This amount is not in addition to the amount listed above, which is available to everyone. For example, if when you die the general exempt amount is $700,000, then a business that qualified for the increased exemption would get another $600,000 exemption, for a total of $1.3 million.

To qualify for this special increased exemption, the business must meet several rules:

It must be more than 50 percent of your estate.
Its principal place of business must be in the United States.
You must meet IRS participation requirements in the business before your death.
You must leave your interest in the business to family members or people who have been actively employed by the business for at least 10 years before your death. (More rules apply if you leave th business to non-U.S. citizens.)
If the people who inherit the business stop participating in the business for at least five of any eight-year period within the 10 years following your death, they will have to pay back some of the tax that was avoided at your death.

Obviously, these new rules are complex and untested. Consult an estate planning specialist if you have questions.


LINK TO SOURCE

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PostPosted: Sun Oct 08, 2006 1:55 pm 
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Still clear as mud to me.

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PostPosted: Sun Oct 08, 2006 2:02 pm 
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Little guys do not die with a million dollars sitting in the bank.


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PostPosted: Sun Oct 08, 2006 2:18 pm 
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My sister and I inherited our parents' entire estate, including their home and the land surrounding it. We did not have to pay estate taxes because it did not appraise at the minimum.

One of the best things elderly people with real property can do is to go ahead and sign over that property to a trusted family member. But I emphasize the word TRUST. I've also heard horror stories of people doing that and then their "trusted" loved one sells it out from under them and they're suddenly homeless.

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PostPosted: Sun Oct 08, 2006 8:35 pm 
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Can you inherit your parents debt?

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PostPosted: Sun Oct 08, 2006 8:48 pm 
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I believe if you are both part owners of say a house, you can indeed lose the jointly owned property. As far as being responsible for their debt, I would have hard time believing that possible.


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PostPosted: Sun Oct 08, 2006 9:14 pm 
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Inherited Debts? Who Pays When My Parents Die?

http://www.insiderreports.com/storypage.asp?ChanID=MN&StoryID=20003353

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PostPosted: Sun Oct 08, 2006 9:48 pm 
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Thank you, thank you, thank you!

If I had a printer I would print the Estate Tax info up and send it to her. As it is, I will hand write it and keep it by the telephone. She calls often.

According to this, in my opinion rich people will benefit at the expense of those less well off. Possibly this person has a LOT more money than I would guess?

I will never know how much money she has, nor do I care, but she is defending this 'Death Tax' business far too energetically for someone who has no horse in that race.

$!,000,000 isn't enough? She isn't that uninformed. And the battle will continue...

Again, thank you all for responding.

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PostPosted: Sun Oct 08, 2006 10:34 pm 
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dori...what kind of printer would be compatible with that computer of yours?

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PostPosted: Sun Oct 08, 2006 10:50 pm 
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I really don't know. I knew I was getting the computer but not a printer because the person who owned it wanted to keep that part of the hardware.

I had the printer that I used with the old computer, but it gave up the ghost before I could even get it installed.

I will get a printer--it just takes time. One learns to have LOTS of patience over a lifetime... Who knows, the person who upgraded his computer may indeed, upgrade his printer too. It does happen.

He does like to change things fairly often, and is considering changing his 'office' soon. He runs iMacs too, so anything he can use, I can use.

Thank you for asking Catherine. I do think I will have a printer at some point here.

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PostPosted: Sun Oct 08, 2006 10:57 pm 
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Let me know if you don't get lucky regarding a printer within a reasonable time...okay?

Catherine

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PostPosted: Sun Oct 08, 2006 11:11 pm 
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Sure will. And thank you for caring!

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PostPosted: Mon Oct 09, 2006 12:39 am 
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CrimsonEagle wrote:


Thanks for the link. What a relief!

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PostPosted: Mon Oct 09, 2006 1:33 am 
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Thanks for the link. What a relief!


Np. What struck me though is that most average/poor families will end up having some if not all of their property absorbed back into the system if they are not frugal. This is a problem, and though it is good that the children do not carry the debts of the parents, this is fubar, and I will tell you why.

My grandmother died when I was 8 years old. Although everyone in the family still disagrees with the doctors final decision on what her sickness was, (Anorexia Nervosa) but let me tell you, it was a long and horrible death. If I remember correctly she was 68 pounds at her death.

Now, my grandmother was a very healthy and active woman. She played soft ball, basketball, and she was a bowler. (grandfather still has the trophy's out after all these years, just as he still wears the wedding ring. He never got remarried.) She was also a very healthy woman from what I am told. Never overly heavy, nor overly thin, but athletic in physique.

The onset was sudden. She started not feeling good, and then nearly every time that she would eat she would throw up. They thought that it was the flu at first, but after a little more than a week they realized that something was wrong. That is when the doctor trips started.

Two years they kept her alive trying to figure out what was wrong with her. My grandfather says that he had some of the best doctors on the east coast trying to figure it out, and he went through a lot of doctors because no one could figure out what was wrong and they were getting desperate.

He spent most of his lifesaving's trying to save my grandmother but to no avail. After she died, he had only a few short years, (2 or 3) before retirement. He retired in 1980. He still had his house, and at the time the money he was bringing in from Soc Sec and pension were sufficient for him to live a fairly comfortable life.

This is no longer the case. Because of inflation in the cost of everything, his monthly payments are not enough. As of right now he owes just under 100k to the banks because he has had to take money out on his house multiple times just to survive. It kills me because there is so little that I can do to help in a financial way, I do what I can but I am the only one because my whole family is having financial trouble other than me. I'm by no means rich, just very frugal, or as my wife likes to put it, a cheap bastard :lol: But, when someone gets desperate, we normally have enough to give them a small bump to help them out for a bit.

I have tried to talk him into selling his place and moving back up with his family in Maine. He just wont do it. He says that this house is all that he has to pass onto the children, (My mother, and two uncles). Me, I say to hell with them Grampy, sell the place and live in comfort, if they don't understand, then fuck em. But he wont do it.
So, he keeps going further into debt, and they let him. The banks know he wont live forever, and eventually they will get their cut. I'm sure that they would be willing to loan him every bit of equity that is in his place.

This is my point. How many do own their stuff outright? How many are there that will end up with all that they worked for being taken in the end?

Who owns what?

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