fjl2nd Posted November 20, 2012 Share Posted November 20, 2012 Are you sure? Do you want Ralph Wilson's heirs to have to pay 400 million in estate tax when he dies? Sure. Link to comment Share on other sites More sharing options...
meazza Posted November 20, 2012 Share Posted November 20, 2012 Sure. Wouldn't that force his heirs to liquidate their holdings? Link to comment Share on other sites More sharing options...
Chef Jim Posted November 20, 2012 Share Posted November 20, 2012 (edited) Sure. Why? Wouldn't that force his heirs to liquidate their holdings? I say get rid of the estate tax and the cost basis step up. Not for all but for higher net worth estates say $5mill. That is the fairest thing. That way the heirs only have to cough up the tax when they sell. In the Wilson case he has enjoyed tax deferred growth of the value of the team since he bought it. Once he dies his heirs inherit the business free and clear of any tax. As meazza points out the estate tax oftentimes forces heirs to sell the business which often is not good for the business, many times forcing it to close. This way the heirs can maintain the business and if/when they decide to sell they will pay a long term gain on it based on the original purchase price of the original family owner. This will eliminate the multi-generational estate tax paid over and over and over. Edited November 20, 2012 by Chef Jim Link to comment Share on other sites More sharing options...
fjl2nd Posted November 20, 2012 Share Posted November 20, 2012 I think an NFL Franchise is an extreme situation so I'm not exactly sure how to approach it. They are worth so much money now. Link to comment Share on other sites More sharing options...
meazza Posted November 20, 2012 Share Posted November 20, 2012 I think an NFL Franchise is an extreme situation so I'm not exactly sure how to approach it. They are worth so much money now. And if Mr Wilson's kids say, "!@#$ it, I'm not paying the tax from my own wealth, I'll sell the team."| What the hell will I do on Sundays? Link to comment Share on other sites More sharing options...
3rdnlng Posted November 20, 2012 Author Share Posted November 20, 2012 I think an NFL Franchise is an extreme situation so I'm not exactly sure how to approach it. They are worth so much money now. What about the OP situation where Mr. Kester's kids may have to pay 22 million in inheritance taxes for an operation that may make 100k-200k annually? How about a company that might employ a couple hundred people and is worth according to the government 25 million but brings in a profit to the owner of 1 million a year. Should the heirs have to pay 10-12 million to the government in inheritance taxes? Should farms be broken up and sold to put up shopping malls in order for the heirs to pay the inheritance tax? Do you actually think all of this is done in a vacuum? Link to comment Share on other sites More sharing options...
Chef Jim Posted November 20, 2012 Share Posted November 20, 2012 I think an NFL Franchise is an extreme situation so I'm not exactly sure how to approach it. They are worth so much money now. Yup, NFL franchises are the only things worth lots of money these days. Link to comment Share on other sites More sharing options...
fjl2nd Posted November 20, 2012 Share Posted November 20, 2012 What about the OP situation where Mr. Kester's kids may have to pay 22 million in inheritance taxes for an operation that may make 100k-200k annually? How about a company that might employ a couple hundred people and is worth according to the government 25 million but brings in a profit to the owner of 1 million a year. Should the heirs have to pay 10-12 million to the government in inheritance taxes? Should farms be broken up and sold to put up shopping malls in order for the heirs to pay the inheritance tax? Do you actually think all of this is done in a vacuum? Honestly, I am not entirely familiar with actual estate planning and the taxation of it. (Although an "Estate Planning and Taxation" class is offered this Spring). I'd like to see ways to protect current operating businesses if the owner were to pass away. I'm sure there are ways to do this already. I'm not an expert on it so I couldn't tell you how. People manage to pass down a lot of wealth down to heirs despite the taxation. Link to comment Share on other sites More sharing options...
meazza Posted November 20, 2012 Share Posted November 20, 2012 Honestly, I am not entirely familiar with actual estate planning and the taxation of it. (Although an "Estate Planning and Taxation" class is offered this Spring). I'd like to see ways to protect current operating businesses if the owner were to pass away. I'm sure there are ways to do this already. I'm not an expert on it so I couldn't tell you how. People manage to pass down a lot of wealth down to heirs despite the taxation. You'll probably learn a lot more from the chef than in the classroom. You just have to bribe him with some coke. Link to comment Share on other sites More sharing options...
fjl2nd Posted November 20, 2012 Share Posted November 20, 2012 You'll probably learn a lot more from the chef than in the classroom. You just have to bribe him with some coke. Haha. It is a Graduate level course so I hope I learn something! Don't think I'm taking it anyways because of scheduling conflicts. But, you're probably right that I will learn more from Chef! Link to comment Share on other sites More sharing options...
Chef Jim Posted November 20, 2012 Share Posted November 20, 2012 Honestly, I am not entirely familiar with actual estate planning and the taxation of it. (Although an "Estate Planning and Taxation" class is offered this Spring). I'd like to see ways to protect current operating businesses if the owner were to pass away. I'm sure there are ways to do this already. I'm not an expert on it so I couldn't tell you how. People manage to pass down a lot of wealth down to heirs despite the taxation. There is no way to protect a current business. The tax is based on the value of the business/asset at the time of death. Under the new rules anything over $1m will be taxed at a maximum of 55% due in cash in 9 months. If a proper trust is in place and there is a couple their exclusion is a million each. That's it. It's pretty much that simple. Now there are ways to provide liquidity for pay the taxes outside of the estate which I've mentioned earlier but the requires life insurance and insurability. It's a stupid law and needs to be changed. Of course people pass wealth down to heirs but that's after the government has taken their slice. You can lose over 75% of qualified money due to taxation upon death. Link to comment Share on other sites More sharing options...
3rdnlng Posted November 20, 2012 Author Share Posted November 20, 2012 You'll probably learn a lot more from the chef than in the classroom. You just have to bribe him with some coke. Chef has only read about it, so maybe a book would be a better bribe. What say you Chef? Link to comment Share on other sites More sharing options...
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