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Look at it as a regular income event. You were taxed when you got that money from whoever gave it to you and now your kids are being taxed when they get the mon
by kllrnohj 11y ago
Look at it as a regular income event. You were taxed when you got that money from whoever gave it to you and now your kids are being taxed when they get the money. Your kids aren't you. Money isn't a taxed-once thing, it's taxed every time it changes hands. Death is an event at which money changes hands (from you to your kids), and is taxed appropriately.
Anyway multi-generation estates are very well tested as being bad for society over time. Just look up monarchies.
- KZeillmann 11y agoThen why not tax everyone when they pass money/assets onto their kids? Why is there an arbitrary ~$5.1 million cutoff? (Not that I have anywhere near that much money, but it's the principle)
- bufordsharkley 11y agoTaxing everyone would be the "correct" solution, but it's more pragmatic/politically expedient to allow a $5mil exemption.
- kllrnohj 11y agoThere's always a cutoff just due to practicality. If you give a friend $5 probably neither of you filed taxes for that. If you give a friend $10m, well, the IRS will probably notice that one. (in the case of a gift tax the cutoff is $14k and yes it applies to your children, see: https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Frequently-Asked-Questions-on-Gift-Taxes https://www.irs.gov/Businesses/Small-Businesses-&-Self-Emplo... )