How much are death taxes
What assets are subject to Death Tax?
Everything a person has of any value counts towards the death tax exemption. This means your car, home, stocks, bonds, bank accounts all are totaled together to calculate if you owe the estate tax. Starting January 1, 2013, under current law, if your total estate is over $1 million, you will owe taxes at a 55% rate. Think about all the assets you own:
- personal property (such as a home, cars, furniture, artwork)
- business assets (property, machinery and inventory)
- investments (stocks, bonds and real estate)
Now think about how much that is worth – these days, it doesn’t take much to push you over the $1 dollar exemption, after which all additional assets are taxed at a 55% rate. It is easy to see why nearly 70% of voters want the death tax repealed permanently.
The estate tax doesn’t just affect millionaires and billionaires, it affects everyday people and America’s main job creating engine – family businesses.
Even at the current $5 million exemption, family businesses and farmers are susceptible because they are “asset rich” and “cash poor” – the great majority of the value is locked in the land and equipment. If the family doesn’t have the cash on hand to pay the tax, they are forced to sell assets and possibly the entire business or farm.
How does the Death Tax work?
For any assets valued over the exemption, the people who inherit the farm, business, or property will owe the tax within nine months of the decedent’s death. For those family businesses that are forced to take out a loan to keep the business running, their tax rate becomes the tax paid, plus the interest owed on the loan.Source: nodeathtax.org