Socrates preguntado en Business & FinanceSmall Business · hace 6 años

How does the US Estate Tax effect "Ma & Pa" businesses, structured as corporations, when they die?

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  • hace 6 años

    Most aren't affected. Very few Ma & Pa businesses are worth over 5.4 million dollars therefore most do not get hit all that hard by the tax. Second the owners are dead, they do not benefit or are harmed by any tax. The next people whom the money is transferred to didn't own that money, assests, etc. They are getting the first 5.4 million without taxes, and are only paying taxes on amounts exceeding that. So I don't really feel sorry for anyone being gifted millions of dollars.

    And Jeffrey is wrong. When all owners die they take the total value of the estate minus 5.4 million dollars before taxing anything. And there are only about a dozen farm estates in the nation that are subject to the estate tax thanks to the 5.4 million cut off. When it was a 2 million cutoff there were only 125 farms in the US that this tax applied to. It really is just a exclusively wealthy tax.

    The tax exists because otherwise some income items wouldn't be taxed at all. In many cases most of the estate tax is the only time those items are taxed.

  • ?
    Lv 7
    hace 6 años

    Using the example of a family farm that, while not generating a huge amount of income, has increased in value because the land has been more valuable and the owners have purchased expensive machinery, irritation equipment, built a bigger house and other buildings, etc.. When the first spouse dies the property passes tax free to the surviving spouse. When that spouse dies estate tax (40% federal + up to 10% that the state charges) must be paid on entire property, including the land, house, furnishings, cars, stocks, - everything.

    Where do the survivors come up with the money to pay that without selling things and breaking up the business?

  • hace 6 años

    When the stockholders die, the stocks go to someone. If the value of the stocks is less than $5 Million, no one pays estates tax. If the value of the stocks is $6 Million and that is the value of the estate, the tax would be $300,000 (6 - 5.25 * 40%).

  • hace 6 años

    most mom and pops aren't structured as corporations....unless you are counting s corporations

    most family farms aren't incorporated, and that land can be valued in the 10's of millions of dollars

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  • hace 6 años

    what do you smoke on? is it small sticksYour blunts are to skinny but that's your buisness.

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  • hace 6 años

    typical republican **** you ******

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