My grandmother is going to die within a year or so, she is 86 and has diabetes, she is going to leave a large amount of money and I am worried that the government is going to take a large part of it. Is this true? Is there a way to prevent it?
2006-07-31 16:56:01 · 8 answers · asked by Anonymous in Politics & Government ➔ Government
In 2005, the net value of an individual's estate must exceed the basic exemption of $2 million. Couples can exempt $4 million. This exemption level will gradually rise to $3.5 million for an individual ($7 million for a couple) by 2009. Small businesses and farms have long enjoyed additional protections.
For the 2006 tax year, the top estate tax rate is 46%. However, after the $2 million basic exemption and other deductions are applied, the average effective estate tax rate — the percentage of the total estate actually paid in taxes — works out to be much lower. In 2001, when the top rate was 55%, the average effective estate tax rate was only 19%. Today, with a lower top rate and a higher exemption, the average effective tax rate would be even lower.
SINGLES
Taxable Estate Size
Estate Tax
$0 to $2 million Zero
$2.0 million and up 46% of the amount over $2,000,000
COUPLES
Taxable Estate Size
Estate Tax
$0 to $4.0 million Zero
$4.0 million and up 46% of the amount over $4,000,000
Who pays the estate tax?
In 2006, the wealthiest 0.27% of Americans are the only ones who pay estate taxes. In 2001, over half of all estate taxes were paid by 3,502 people with estates larger than $5 million — representing the top 0.14% of all Americans.
So look over the figures you may not need a lawyer at all.
2006-07-31 17:30:04 · answer #1 · answered by tough as hell 3 · 0⤊ 0⤋
it's called the estate tax and it's a massive source of tax revenue. it was instituted because rich people kept finding loopholes to pass their money on without it being taxed. unfortunately it didn't work. mostly middle income people are affected by the estate tax because rich people can pay fancy accountants to do 'creative' (read: illegal) tax shelters that keep the money from going to taxes. so unless you can afford that fancy accountant there's not too mcuh you can do.
2006-08-01 00:03:50 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Why is recieving money from a soon to be dead relative an Important Question???
Can't wait to get her in the Ground?
2006-08-01 00:19:08 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Yup. Yes there is a way to prevent it, but many people would consider this unethical.
2006-07-31 23:59:28 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Make sure she has a will; a good will from an attorney.
2006-07-31 23:59:19 · answer #5 · answered by playdoh1986 6 · 0⤊ 0⤋
Yes, there is - it complicated - get a lawyer, it's worth it.
2006-08-01 00:00:05 · answer #6 · answered by Calee 6 · 0⤊ 0⤋
i'm not sure but i think so. no way to prevent(i think).
2006-08-01 00:00:22 · answer #7 · answered by K 3 · 0⤊ 0⤋
Sorry to hear that.
2006-08-01 00:12:46 · answer #8 · answered by Huevos Rancheros 6 · 0⤊ 0⤋