Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Who died and left the US $7B?

sherwood.news

Post reply on HN
Print view View original

491–500 of 589 posts

Re: Who died and left the US $7B?

#491

Post by RHSeeger »

AnthonyMouse wrote: post #469
eli wrote: post #355

Earlier quoted context omitted.

These are just generic anti-tax arguments. Yes, if you pay your taxes you will have less money. And maybe you would have used some of that money to do good things. Oh well. I don't think anyone is seriously suggesting you shouldn't be allowed to borrow against assets. That isn't even the problem. The problem is that you can go your whole life without paying taxes on gains of those assets, then pass them on to your he…

> Yes, if you pay your taxes you will have less money. The issue is that it can cause you to have less than zero money, and be forced to sell (possibly illiquid) assets solely in order pay the tax. This is kind of a major deal, e.g. you have an asset worth $20M, but not if you have to sell it right now because it would take time to find the right buyer, so instead you're forced to sell it for $8M to the only person w…

> If you make it so the tax basis stays low so a sale would have to pay tax on 95% of the value instead of 25%, she doesn't sell, you don't even get the tax on the 25% and the tax base stays lower because she doesn't switch to the more productive investment.

Eventually, someone will sell it. And, at that point, if the tax basis stays with it, all taxes that weren't payed before are payed then. Having the tax basis transfer with the property doesn't prevent the taxes from being payed, it just (might) defer them. Having the tax basis _not_ transfer gets rid of the taxes (on the currently accrued profit) completely.

Re: Who died and left the US $7B?

#492

Post by kortilla »

ramzez wrote: post #352
kortilla wrote: post #133

Earlier quoted context omitted.

The IRS doesn’t track assets, so unlikely. They don’t really even know how wealthy small business owners are

but they track assets of common people especially overseas like FATCA

Not common people in the US. FATCA is really the only exemption and that’s quite uncommon.

Re: Who died and left the US $7B?

#493

Post by paxys »

tutorialmanager wrote: post #484
dixie_land wrote: post #464

Earlier quoted context omitted.

Why would capital gains be taxed in the first place? It's simply double taxation on the income

Also, most of my capital gains are due to inflation and not an increase in value.

Then you really need to pick better investments. Say, any broad market index fund.

Re: Who died and left the US $7B?

#494

Post by schneems »

AmericanChopper wrote: post #200
schneems wrote: post #118

Earlier quoted context omitted.

> we should probably celebrate gifts to the US government more than we do. I had the idea that we should put a donation box on tax forms. The 100 top donators get on the “US 100” list (like Forbes) but it’s based ONLY on how much you donate, not how much you claim to be worth. It’s one thing to claim to be rich to a Forbes reporter, it’s another to have the (tax) receipts to back it up.

Most tremendously wealthy people don’t want to be known for being tremendously wealthy. Unless being known for being tremendously wealthy is a part of your wealth accumulating strategy, the attention it brings is almost entirely negative. Being tremendously wealthy without millions of people constantly chirping about clawing as much of it away from you as possible, or demanding an explanation from you every time you…

> Most […] don’t want to be known

But some do.

Re: Who died and left the US $7B?

#495

Post by paxys »

aprilthird2021 wrote: post #391
ip26 wrote: post #154

Earlier quoted context omitted.

What are the odds of something like WWII though, compared to the odds it’s all spent by the second generation?

Normally you'd be right, but we are eerily close to a WWIII right now...

We have been "eerily close" to WWIII since the day WWII ended. There's nothing really special about today's situation.

Re: Who died and left the US $7B?

#498

Post by mindslight »

skizm wrote: post #487
mindslight wrote: post #449

Earlier quoted context omitted.

First, a disclaimer that shouldn't even need to be said, but the legal regime being what it is - I'm not an accountant nor an attorney, but rather an just engineer that digs into the specific details of things rather than paying professionals to screw it up for me. So there is no warranty or representation for anything I'm saying, and it's merely meant as starting pointers for your own independent analysis. Being a R…

Cool, thanks for the info! Definitely feels like they should just tax any asset sales needed to pay debts before the step-up happens, but I’m sure there’s a lot of push back against that idea.

That feels like the wrong approach to me, because this topic seems like a loophole in capital gains tax rather than estate tax. Taking a loan using untaxed assets as collateral is essentially realizing (most) of the income from the assets as cash. Capital gains tax should apply then.

Also, flip your example around and say someone took a $9B loan [0] against their $10B in stock. Now when they die, their estate has only $1B worth of net assets, yet ~$4B in estate tax liability under your idea. It's better to prevent this situation from happening by making the taxes due ahead of time, similar to how once you give away enough taxable gifts (form 709) you need to actually start prepaying what would have been paid by your estate.

[0] and somehow spent it. I stuck with the billions figures because it makes the analysis easier (tax rate asymptoting out to the top bracket), but this is likely to be more relevant with much smaller estates.

Re: Who died and left the US $7B?

#499

Post by mindslight »

RustyEarthfire wrote: post #489
mindslight wrote: post #389

Earlier quoted context omitted.

The asset value minus the debt (both on the date of death [0]) is what contributes to estate tax liability on the 706 form [1]. Then going forward, the asset basis is stepped up to what it was on the date of death (for both the estate entity and downstream beneficiaries), based on the idea the asset has already been taxed by the estate tax. This assumption falls apart when there isn't much value left in the asset-min…

The "already taxed by the estate tax" justification is ridiculous to start with. If you have unpaid income tax it doesn't get waived to avoid "double taxation"; certainly you don't get a refund on all the taxes already paid on your savings. But if you kick the can down the road long enough with unrealized gains then you get a special bonus?

shrug that's just the way it was explained to me and it seems plausible. Long term capital gains is 15 or 20 percent, whereas the estate tax rate basically starts there and goes up to double. If someone never realizes their gains, then perhaps it makes sense to not be taxed on them. The loophole here is living people realizing their gains, but doing so using loans so they can avoid paying taxes on them.

Re: Who died and left the US $7B?

#500

Post by lazide »

jacobolus wrote: post #481
lazide wrote: post #399

Earlier quoted context omitted.

why would they do that when they can take over the gov’t and steal everyone else’s stuff? (see Russia, Venezula, China, and many others) Notably, the biggest thefts seem to happen when they can convince people that the gov’t is doing it for ‘the good of the people’, and they’re ‘going after the rich people’, and then they can pocket it when no one is looking.

In the USA it's mostly "the rich people" and extremely profitable corporations who have captured parts of the government and figured out ways to corruptly siphon money out of the rest of the economy into their own pockets. This is a reason why we need better anti-corruption legislation, an end of the "super PAC", much higher inheritance taxes with fewer loopholes, and structural reforms to fix a profoundly corrupt Su…

Sure, but that isn’t what the comment I was replying to was saying, was it?

Also, a lot of what you’re describing seems like regulatory capture.

Post reply on HN