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Also note that there is a huge exemption (apparently $3.5m last year, and $1m next year if they don't change it). It's only 45% beyond that point, like tax bra
by ryanf 16y ago
Also note that there is a huge exemption (apparently $3.5m last year, and $1m next year if they don't change it). It's only 45% beyond that point, like tax brackets.
- d2viant 16y agoOnly 45% at the federal rate. Don't forget (in most cases) the state taxes that get levied as well.
- Retric 16y agoThere are a lot of ways of avoiding this, EX1: you can give your wife unlimited assets without tax implications. EX2: Let's say you and your wife have a 7 million$ 50% of which is appreciated assets, and 2 million in life insurgence and 3 children. Each of you can give 1 million to each child, so 6 million is exempt, as is all life insurgence thus only the last million is taxed at 45%. Resulting in a 0.450 / ( 7 + 2) = 5% effective tax rate. Note: If they actually sold their appreciated assets they would pay more in taxes. EX3: 1 billion in assets. Set's up a blind trust = zero direct taxes on death. Money can compound tax free in the trust and is only taxed on disbursement. EX4: 1 billion donation to the red cross = zero tax. PS: If you do nothing and leave 5million to 1 person the effective tax rate is still only 36%. You really have to have huge amount in assets and stupid tax advice for this to be a major issue.