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I encourage you to actually know what you are talking about before posting. If I have $1 million in cash when I die, my heirs have to pay taxes on that, even t

I encourage you to actually know what you are talking about before posting. If I have $1 million in cash when I die, my heirs have to pay taxes on that, even though I paid taxes on it when I originally earned it. You cannot net out the capital gains and just pay tax on that, everything is taxed.

jeremytliles 18y ago
Your heirs didn't earn that money, so they're only paying taxes once. You pay once for earning it, they pay once for "earning" it via your departure from this earth. But presumably if you have lots of money, you've already set up trusts, paid for college, given lifetime gifts, etc. so your heirs are already pretty far ahead of the average person. Seems like a perfectly good way to encourage at least a tiny amount of wealth redistribution in a society where wealth is not very well distributed at all.
- Retric 18y ago
  It could be setup like that but it's not. You don't pay capital gains at the time of death and the people you give it to don't pay when they receive it so only some of the money is ever taxed. PS: The really sick thing is giving stock to a charity: "By doing so, you never have to calculate gains nor list the sale as income on your tax return. Moreover, if the stock was held more than a year (long-term gain), you get to itemize the charitable deduction at fair market value on the date of gift." (http://invest-faq.com/cbc/tax-cap-gains-basis.html http://invest-faq.com/cbc/tax-cap-gains-basis.html) To find out why this is messed up calculate what happens when you give 100$ to charity now vs buying 100$ in stock that is worth 10x a much in 20 years. I had an aunt who was audited and ended up getting close to a million back because of this stuff.
jeremytliles 18y ago
Plus, you're ignoring the fact that there is a credit (which can be thought of as an exemption), which is different year-to-year, but not less than $1,000,000. I don't feel like going through all the details, but you can easily research this. People need to read up on this stuff. There is a ton of FUD surrounding this issue.
jsmcgd 18y ago
I encourage you to not use an unnecessarily aggressive tone when posting ;)
Retric 18y ago
First off I never spoke about cash I said the gain in the value of a stock that you buy is not taxed. (http://invest-faq.com/cbc/tax-cap-gains-basis.html http://invest-faq.com/cbc/tax-cap-gains-basis.html) My point is covered under "You inherit a security" but reading the whole thing is useful. Second, in you only leave 1 million in stock to your child they pay zero tax on that. PS: There are a tun of way's the tax code helps high net worth individual. If you have 1billion in capital gains you pay 15% before deductions, but if you're a contractor making 10$ an hour you pay more than that to SS and Medicare let alone the rest of the tax code.
axod 18y ago
Earn money, pay tax. Save money, pay tax on the interest. Buy stuff, pay sales tax. Die, pay tax again. I'd prefer just a single tax. Get rid of the unfair ones like inheritance tax which stops people getting on the housing ladder etc.

jeremytliles 18y ago

Your heirs didn't earn that money, so they're only paying taxes once. You pay once for earning it, they pay once for "earning" it via your departure from this earth. But presumably if you have lots of money, you've already set up trusts, paid for college, given lifetime gifts, etc. so your heirs are already pretty far ahead of the average person. Seems like a perfectly good way to encourage at least a tiny amount of wealth redistribution in a society where wealth is not very well distributed at all.

Retric 18y ago
It could be setup like that but it's not. You don't pay capital gains at the time of death and the people you give it to don't pay when they receive it so only some of the money is ever taxed. PS: The really sick thing is giving stock to a charity: "By doing so, you never have to calculate gains nor list the sale as income on your tax return. Moreover, if the stock was held more than a year (long-term gain), you get to itemize the charitable deduction at fair market value on the date of gift." (http://invest-faq.com/cbc/tax-cap-gains-basis.html http://invest-faq.com/cbc/tax-cap-gains-basis.html) To find out why this is messed up calculate what happens when you give 100$ to charity now vs buying 100$ in stock that is worth 10x a much in 20 years. I had an aunt who was audited and ended up getting close to a million back because of this stuff.

jeremytliles 18y ago

Plus, you're ignoring the fact that there is a credit (which can be thought of as an exemption), which is different year-to-year, but not less than $1,000,000. I don't feel like going through all the details, but you can easily research this. People need to read up on this stuff. There is a ton of FUD surrounding this issue.

jsmcgd 18y ago

I encourage you to not use an unnecessarily aggressive tone when posting ;)

Retric 18y ago

First off I never spoke about cash I said the gain in the value of a stock that you buy is not taxed. (http://invest-faq.com/cbc/tax-cap-gains-basis.html http://invest-faq.com/cbc/tax-cap-gains-basis.html) My point is covered under "You inherit a security" but reading the whole thing is useful. Second, in you only leave 1 million in stock to your child they pay zero tax on that. PS: There are a tun of way's the tax code helps high net worth individual. If you have 1billion in capital gains you pay 15% before deductions, but if you're a contractor making 10$ an hour you pay more than that to SS and Medicare let alone the rest of the tax code.

axod 18y ago

Earn money, pay tax. Save money, pay tax on the interest. Buy stuff, pay sales tax. Die, pay tax again. I'd prefer just a single tax. Get rid of the unfair ones like inheritance tax which stops people getting on the housing ladder etc.