Re: inheritance taxes/US

In article <2lqpe1pscaleg92otfbo8vjrr5jdhm5vds@xxxxxxx>, Rick <Rick@xxxxxxxxxxxx> wrote:

>Inheritance taxes are strictly state taxes; the federal government
>does not levy an inheritance tax, although it does impose an estate
>tax.

What's the difference, in practical terms?

[snip]
>Pay attention Larry. In 2001 the marginal rate for estate taxes on
>your hypothetical one million dollar farm was 41%. YES $410,000!!!

No, not $410,000. You misunderstand the concept of "marginal rate". The
marginal rate applies to income (or inheritances) above a certain level, not
on the entire amount of the income (or inheritance).

>If you do not beleive this just check out Internal Revenue Service
>instructions for Form 706- United States Estate (and
>generation-skipping) Tax Return.

Indeed, I do not believe this, and with good reason: it is not true.

Table A - Unified Rate Schedule, on page 4, clearly shows that the tax on an
estate with a taxable value of one million dollars is $248,300, or 24.83%. The
41% rate applies to amounts *over* one million. Again, the same table clearly
shows that for an estate with a taxable value of $1.1M, the tax is $248,300
plus 41% of the amount over $1M, for a total of $289,300.

--
Regards,
Doug Miller (alphageek at milmac dot com)

It's time to throw all their damned tea in the harbor again.
.

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