I have never understood why there has ever been a death tax as everything purchased was paid for with money that taxes were already collected. Now with 2013 looming ahead and the demise of the Bush tax cuts, the death tax will be a death knell for family run businesses and farms. Especially farms. How can the government think they deserve 55% of the value of anything over $1million. Between land and equipment for a farm, $1 million is nothing.

http://www.foxnews.com/politics/2012...th-tax-impact/

Of course then the state takes their cut. Don't know what it is now, but I know when my mother passed away in 1990, even though the value of the estate was only around $12,000, Pa. got 6%.

 

Forcing families to liquidate the farm to pay inheritance taxes is a time honored American tradition. The reduction in the 'death tax' under the Bush tax cuts was the exception, and it was always supposed to sunset in 2010.

How can they government think they deserve 55% of the value of your property (over the first $1 million)?

Simple: You didn't build that.

 

you're not a farm kid are you?

 

It's sarcasm. I HATE the fact the government will once again tax you for dying.


I'm not from a farm family, but ag is huge in my area and I know many farmers.


Let's say your dad has a farm worth $2 million and you have four brothers and sisters. You think the 5 of you will each inherit 1/5 of the farm, or $400,000 when your dad dies.

Unfortunately, starting in January, the government will once again require your family to pay $550,000 death tax when your dad dies. If you don't have the cash, you will sell the farm (say for $1,400,000 net after you pay a broker commission). You and each siblings net $240,000 each, not $400,000, and and the feds get $550,000.

I think it is an outrage. But millions of Americans want the government to take that $550,000 from your family and will make you sell the farm to pay it.

 

This is exactly how one of my family members lost their farm. It was slowly sold off to large franchises to pay the death tax.

 

The death tax is nothing but legalized theft by gov't.

 

The politically correct term is redistribution.

Theft is bad. Redistribution from the evil and rich to the just and poor is good.

 

This is outrageous. People need to wake the **** up.

 

Well, maybe the politicians can come up with a deal beofre January 1.

The pre-Bush 55% on everything over $1 million in assets seems a bit much even for the Dems. The speculation is Obama wants 45% and the Republicans would settle for 35%.

Get a good accountant and lawyer. Maybe create a limited partnership, have a portion of the farm gifted to the heirs each year, etc...Play the game the way the IRS wants and get professional help now, or pay up later.

FWIW, the rules affect non-farmers, too. The thing is a farm can be very land rich but income and cash poor, especially in an area where land values are driven up by pressure for development. A farm with $2 million in land may net way less than $100,000/year for a family. So you can live poor, but have the government death tax you like you are rich.

It sucks.

But unfortunately, a lot of people in this country, perhaps even a majority, WANT the government to tax you off your family farm.

Wait until the real inflation hits. Then there will be a whole new crop of people that are 'wealthy' on paper, and subject to death tax.

 

Exactly......

My parents just got done putting their estate in a trust for us kids....cost them around $2K to do it but in the end it screws the feds and the state of WI.....

 

That's exactly what happened to my family (extended family). They bought the land out in the middle of the country and started farming. After the first generation died off the city had started to encroach, so the second generation had to sell off a chunk to McDonald's to pay the death taxes. When the second generation died off, they were in the middle of the city and land prices had started their dramatic rise during the 80's. The third generation had to sell off a huge chunk to the Red Roof Inn. The forth generation talked with the third and agreed that it would be better if they just sold everything off when they retired and slowly pass the money down over the years. If they would have kept the land and passed it on in the will, so much of the property would have had to be sold, that the only thing left of the farm would be the house with a good sized yard.

 

FWIW, there is currently a one time exemption that allows each person to 'gift' up to $5 million in real estate to their heirs by the end of the year. So that's up to $10 million per couple.

If you have lots of property and your accountant did not contact you, call them and find out if it's too late. It could save you up to $5.5 million in death tax.

 

A living trust would eliminate the taxes.............with a full transfer of property to relatives of choice.

 

Assuming the dems don't kill it like they want to do with many "loopholes". I expect they will go as far as to eliminate your mortgage deduction, but leave those loopholes that allow people who pay no taxes to receive a refund.

 

The mortgage deduction should be eliminated. It should have never been a deduction, why should the government help anyone pay for their home? Either one can afford to purchase or they cannot. Years ago, there was a rent deduction and that went away also.