Time: GOP senators looking for a RICH KATRINA CORPSE for estate tax pitch

[Dauphin]

The are some Chargeable Lifetime Transfers, but they tend to be trusts and the like.

[KrazyHorse]

It really sounds like the loopholes just need to be closed on the gift end instead of scrapping the whole thing.

Man, your tax system is even more screwed up than the US or Canada's

[rah]

Just purchase lots of life insurance since policy payouts aren't taxable.

[Dauphin]

There is CGT taxation on gifts, but they often just get rolled over until the gift is sold.

[Drogue]

Originally posted by Sandman
Do you object to VAT as well, then?

On principle, yes, but as it gives a disincentive to spend, in practical terms it think it's a good thing.

[Drogue]

Originally posted by KrazyHorse
Man, your tax system is even more screwed up than the US or Canada's

You have no idea. Our tax code runs to 19 volumes Admittedly it was a *lot* shorter before Gordon Brown, but it's the price we pay for a stable economy.

[KrazyHorse]

Originally posted by rah
Just purchase lots of life insurance since policy payouts aren't taxable.

Wrong

http://www.irs.gov/businesses/small/article/0,,id=98968,00.html

Estate tax may apply to your taxable estate at your death. Your taxable estate is your gross estate less allowable deductions.

Gross Estate

Your gross estate includes the value of all property in which you had an interest at the time of death. Your gross estate also will include the following.

* Life insurance proceeds payable to your estate or, if you owned the policy, to your heirs.
* The value of certain annuities payable to your estate or your heirs.
* The value of certain property you transferred within 3 years before your death.
* Trusts or other interests established by you or others in which you have certain powers.

Taxable Estate

The allowable deductions used in determining your taxable estate include:

1) Funeral expenses paid out of your estate,
2) Debts you owed at the time of death, and
3) The marital deduction (generally, the value of the property that passes from your estate to your surviving spouse).

[rah]

* Life insurance proceeds payable to your estate or, if you owned the policy, to your heirs.

If you own them. If the policy is taken out by the heir it's not part of the estate.

[mrmitchell]

This is how quite a few family farms ended up in the hands of large corporations or developers. The kids had to sell all/part of farms to pay the taxes. I assume that those that support estate taxes approve of this.

I think NY Times or Newsweek or a Republican propoganda machine or...well, anyway, some major very important media tried to find a case of a family farm that had been lost to estate taxes.

Result? They couldn't find a single case, at all, ever, in any part of the country, at any timeframe in our history, IIRC

[KrazyHorse]

Originally posted by rah
* Life insurance proceeds payable to your estate or, if you owned the policy, to your heirs.

If you own them. If the policy is taken out by the heir it's not part of the estate.

As well it shouldn't be.

[rah]

Tell my buddy. I'm sure he'll be pleased to know he didn't have to sell their farm.

I guess they didn't look very hard. I personally know of 2.

[KrazyHorse]

Still isn't a loophole, since the insurance has to be paid for by the heir. If you pay for it for him then that's a gift.

[rah]

The yearly premium is usually lower than what can be given as a gift non taxable.

[KrazyHorse]

So it would be a better plan to pay the money directly into some sort of investment portfolio owned by the beneficiary.

The insurance company isn't there to make you money, you know...

11000 dollars a year won't buy you very much life insurance when you're 70 or 75

Certainly not enough to make a difference when you're talking about estates worth 7 figures

[KrazyHorse]

Basically, the thing to do is to ensure that the gift tax and estate taxes are harmonised to the extent that neither is a loophole for the other.