1. Gifts are not taxable until they reach a certain amount because, double dipping ($11,000/yr).
I thought that inherited income (however we're defining that--houses, cars, piles of gold doubloons) wasn't taxed until it reached a million.
Up until the punching, it was a real nice party.
Kaylee ,'Shindig'
Natter 37: Oddly Enough, We've Had This Conversation Before.
Off-topic discussion. Wanna talk about corsets, duct tape, or physics? This is the place. Detailed discussion of any current-season TV must be whitefonted.
Calli - Jul 27, 2005 7:51:31 am PDT #3233 of 10002
I must obey the inscrutable exhortations of my soul—Calvin and Hobbs
bon bon - Jul 27, 2005 7:52:39 am PDT #3234 of 10002
It's five thousand for kissing, ten thousand for snuggling... End of list.
Gifts are not inherited income as far as the tax law is concerned; it applies to gifts while the giver is still living.
§ ita § - Jul 27, 2005 7:53:01 am PDT #3235 of 10002
Well not canonically, no, but this is transformative fiction.
I buy a stock for $60K. I die and you get the stock, now worth $300K. You pay estate taxes on $300K.
Inheriting is expensive, especially if the market crashes the day after you pay tax.
Jesse - Jul 27, 2005 7:53:40 am PDT #3236 of 10002
Sometimes I trip on how happy we could be.
You pay estate taxes on $300K. You later sell them for $450K. You then pay cap gains tax on $150K.
Oh, OK. That's not as bad as I thought.
Randomly, I am extremely pleased with my current ability to understand this stuff.
Jesse - Jul 27, 2005 7:54:23 am PDT #3237 of 10002
Sometimes I trip on how happy we could be.
Oh, and in other taxable news, prizes are totally taxed, so don't go on The Price Is Right and win a car if you're broke.
-t - Jul 27, 2005 7:55:23 am PDT #3238 of 10002
I am a woman of various inclinations and only some of the time are they to burn everything down in frustration
As I understand it, if I win a Ferrari on a game show, that's seen as taxable income.
Yes, and this also seems odd to me. But the unrealized gains thing moreso. Say you inherit a car that th deceased bought new for some fairly trivial amount of money but kept in pristine condition and pased on to you, who would like to keep it for the sentimental value of thinking of all the love and care deceased person lavished on it. But it's now worth $2 million and you don't have the cash to pay the taxes. I can see where that would upset people.
Calli - Jul 27, 2005 7:56:33 am PDT #3239 of 10002
I must obey the inscrutable exhortations of my soul—Calvin and Hobbs
Gifts are not inherited income as far as the tax law is concerned; it applies to gifts while the giver is still living.
Right. And I was saying that gifts above a certain amount are taxed ($11,000 is it?) and inherited inccome above a certain amount is taxed, (I think someone mentioned a million dollar limit, but I wouldn't swear to it). Since I figure an inheritence is just a gift you get when the giver is beyond having a use for it, I'm not seeing the difference an estate tax makes, aside from lower exempted amounts for gifts from live folks.
-t - Jul 27, 2005 7:57:00 am PDT #3240 of 10002
I am a woman of various inclinations and only some of the time are they to burn everything down in frustration
Oh, and in other taxable news, prizes are totally taxed, so don't go on The Price Is Right and win a car if you're broke.
This came up on Mayberry RFD when Aunt Bea won a washing machine.
Sue - Jul 27, 2005 7:57:48 am PDT #3241 of 10002
hip deep in pie
Oh, and in other taxable news, prizes are totally taxed, so don't go on The Price Is Right and win a car if you're broke.
Unless you're Canadian, because Windfalls aren't taxed. But if I won a car on TPIR, I get killed on the duty to bring it into the country.
Steph L. - Jul 27, 2005 7:58:54 am PDT #3242 of 10002
I look more rad than Lutheranism
ETA: Cindy, you do when it comes to credit cards etc.
Only if you're also inheriting anything of value. You're not responsible for someone else's credit card debt, if they die without any estate that they're leaving you. If they're leaving you a house, etc., then there is an estate, and so of course you're responsible for it. If grandma dies leaves nothing + credit card bills, you don't inherit those, unless you have a joint account or something.
Is that absolutely positively for-sure true? Because I'm really afraid of inheriting my Dad's significant debt.