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Participant[quote=meadandale][quote=deadzone]Right or wrong I’m all for higher inheritance tax. What did those worthless, spoiled rich kids to do deserve that financial windfall? They didn’t do shit, their parents did, or their grandparents. I say tax the shit out of em. You can call it “double taxation” if you want but all the same, it would rather them pay more than the rest of us.
Anyone who relies on their family for their financial well being is a loser in my book.[/quote]
Envy much?
The irony is that this tax often hits the children of family owned farms…who end up having to sell the family property in order to pay the estate tax. Awesome..more land for the corporations to gobble up. More unintended consequences…[/quote]
Really? Often hits the children of family owned farms? Sad story. At least it would be if it really happened that way. Having done estate planning for many years, it never made sense to me when I first heard the “sad family farm” story. I dug into it a bit a few years ago. Couldn’t find a single credible instance of it actually happening that actually included the facts of the case. Not a one. Not even one where I could pick it apart and explain why it didn’t make any sense. Nothing. Maybe it has happened. But I suspect it has been so incredibly rare over the last 10 years as to be a non-issue.
It is as absurd an argument as that in support of continued tax cuts for the wealthy so that small business doesn’t suffer.
Participant[quote=meadandale][quote=deadzone]Right or wrong I’m all for higher inheritance tax. What did those worthless, spoiled rich kids to do deserve that financial windfall? They didn’t do shit, their parents did, or their grandparents. I say tax the shit out of em. You can call it “double taxation” if you want but all the same, it would rather them pay more than the rest of us.
Anyone who relies on their family for their financial well being is a loser in my book.[/quote]
Envy much?
The irony is that this tax often hits the children of family owned farms…who end up having to sell the family property in order to pay the estate tax. Awesome..more land for the corporations to gobble up. More unintended consequences…[/quote]
Really? Often hits the children of family owned farms? Sad story. At least it would be if it really happened that way. Having done estate planning for many years, it never made sense to me when I first heard the “sad family farm” story. I dug into it a bit a few years ago. Couldn’t find a single credible instance of it actually happening that actually included the facts of the case. Not a one. Not even one where I could pick it apart and explain why it didn’t make any sense. Nothing. Maybe it has happened. But I suspect it has been so incredibly rare over the last 10 years as to be a non-issue.
It is as absurd an argument as that in support of continued tax cuts for the wealthy so that small business doesn’t suffer.
Participant[quote=meadandale][quote=deadzone]Right or wrong I’m all for higher inheritance tax. What did those worthless, spoiled rich kids to do deserve that financial windfall? They didn’t do shit, their parents did, or their grandparents. I say tax the shit out of em. You can call it “double taxation” if you want but all the same, it would rather them pay more than the rest of us.
Anyone who relies on their family for their financial well being is a loser in my book.[/quote]
Envy much?
The irony is that this tax often hits the children of family owned farms…who end up having to sell the family property in order to pay the estate tax. Awesome..more land for the corporations to gobble up. More unintended consequences…[/quote]
Really? Often hits the children of family owned farms? Sad story. At least it would be if it really happened that way. Having done estate planning for many years, it never made sense to me when I first heard the “sad family farm” story. I dug into it a bit a few years ago. Couldn’t find a single credible instance of it actually happening that actually included the facts of the case. Not a one. Not even one where I could pick it apart and explain why it didn’t make any sense. Nothing. Maybe it has happened. But I suspect it has been so incredibly rare over the last 10 years as to be a non-issue.
It is as absurd an argument as that in support of continued tax cuts for the wealthy so that small business doesn’t suffer.
Participant[quote=flu][quote=Diego Mamani]That’s simple FLU… Once you inherit the note, you own the property free and clear.
But if your wife has siblings, they may jointly inherit the note… in which case you still have to pay back the loan.[/quote]
But let’s just assume that right now, there are no siblings to share the estate….If you (as the debtor) refuse to pay the loan, could you (as the creditor) simply not call the loan and just take the loss? I ask because, let’s say the current estate tax exclusion is $5million, and the estate holds a say $2.5 million note secured by some property. And since you (debtor) refuse to pay, it’s no longer “performing”… What amount is used concerning this note towards the estate tax exclusion computation? The original amount written on the loan ($2.5 million) or the current face value of the note ($0, since it’s no longer performing since you, the debtor, refuse to pay off the note)…More importantly, does the IRS require you (creditor) to actually try to collect on a loan. Or could you just eat the loan? And BTW, are loan forgiveness still not a taxable event in the current environment?
You know, I’m just asking because, well just asking. If it’s asinine to ask, so be it.[/quote]
Always scheming, aintcha?
No bad debt deduction unless there is a bonafide debt. A debt to yourself doesn’t quite qualify.
The debt forgiveness is a pretty damn good catch on your part. The tax relief for debt forgiveness on a primary residence only runs through 2012, then reverts to the old law. Debt forgiven will be taxable to a solvent taxpayer.
Extra bonus scheming penalty for you too. Even if it otherwise would work, it’s worse than a wash. Bad debt deduction is a capital loss, limited to $3,000 a year (over and above capital gains.) Debt forgiveness is ordinary income. So you’ll pay even more current taxes than if the debt was just cancelled.
(As an aside, when doing estate planning, debts like this should NEVER be forgiven in a will. It creates taxable income for the beneficiary. Rather, the debt should either be specifically identified for inheritance, or not mentioned at all, and will be part of the remainder estate and can be dealt with as an estate distribution.)
Participant[quote=flu][quote=Diego Mamani]That’s simple FLU… Once you inherit the note, you own the property free and clear.
But if your wife has siblings, they may jointly inherit the note… in which case you still have to pay back the loan.[/quote]
But let’s just assume that right now, there are no siblings to share the estate….If you (as the debtor) refuse to pay the loan, could you (as the creditor) simply not call the loan and just take the loss? I ask because, let’s say the current estate tax exclusion is $5million, and the estate holds a say $2.5 million note secured by some property. And since you (debtor) refuse to pay, it’s no longer “performing”… What amount is used concerning this note towards the estate tax exclusion computation? The original amount written on the loan ($2.5 million) or the current face value of the note ($0, since it’s no longer performing since you, the debtor, refuse to pay off the note)…More importantly, does the IRS require you (creditor) to actually try to collect on a loan. Or could you just eat the loan? And BTW, are loan forgiveness still not a taxable event in the current environment?
You know, I’m just asking because, well just asking. If it’s asinine to ask, so be it.[/quote]
Always scheming, aintcha?
No bad debt deduction unless there is a bonafide debt. A debt to yourself doesn’t quite qualify.
The debt forgiveness is a pretty damn good catch on your part. The tax relief for debt forgiveness on a primary residence only runs through 2012, then reverts to the old law. Debt forgiven will be taxable to a solvent taxpayer.
Extra bonus scheming penalty for you too. Even if it otherwise would work, it’s worse than a wash. Bad debt deduction is a capital loss, limited to $3,000 a year (over and above capital gains.) Debt forgiveness is ordinary income. So you’ll pay even more current taxes than if the debt was just cancelled.
(As an aside, when doing estate planning, debts like this should NEVER be forgiven in a will. It creates taxable income for the beneficiary. Rather, the debt should either be specifically identified for inheritance, or not mentioned at all, and will be part of the remainder estate and can be dealt with as an estate distribution.)
Participant[quote=flu][quote=Diego Mamani]That’s simple FLU… Once you inherit the note, you own the property free and clear.
But if your wife has siblings, they may jointly inherit the note… in which case you still have to pay back the loan.[/quote]
But let’s just assume that right now, there are no siblings to share the estate….If you (as the debtor) refuse to pay the loan, could you (as the creditor) simply not call the loan and just take the loss? I ask because, let’s say the current estate tax exclusion is $5million, and the estate holds a say $2.5 million note secured by some property. And since you (debtor) refuse to pay, it’s no longer “performing”… What amount is used concerning this note towards the estate tax exclusion computation? The original amount written on the loan ($2.5 million) or the current face value of the note ($0, since it’s no longer performing since you, the debtor, refuse to pay off the note)…More importantly, does the IRS require you (creditor) to actually try to collect on a loan. Or could you just eat the loan? And BTW, are loan forgiveness still not a taxable event in the current environment?
You know, I’m just asking because, well just asking. If it’s asinine to ask, so be it.[/quote]
Always scheming, aintcha?
No bad debt deduction unless there is a bonafide debt. A debt to yourself doesn’t quite qualify.
The debt forgiveness is a pretty damn good catch on your part. The tax relief for debt forgiveness on a primary residence only runs through 2012, then reverts to the old law. Debt forgiven will be taxable to a solvent taxpayer.
Extra bonus scheming penalty for you too. Even if it otherwise would work, it’s worse than a wash. Bad debt deduction is a capital loss, limited to $3,000 a year (over and above capital gains.) Debt forgiveness is ordinary income. So you’ll pay even more current taxes than if the debt was just cancelled.
(As an aside, when doing estate planning, debts like this should NEVER be forgiven in a will. It creates taxable income for the beneficiary. Rather, the debt should either be specifically identified for inheritance, or not mentioned at all, and will be part of the remainder estate and can be dealt with as an estate distribution.)
Participant[quote=flu][quote=Diego Mamani]That’s simple FLU… Once you inherit the note, you own the property free and clear.
But if your wife has siblings, they may jointly inherit the note… in which case you still have to pay back the loan.[/quote]
But let’s just assume that right now, there are no siblings to share the estate….If you (as the debtor) refuse to pay the loan, could you (as the creditor) simply not call the loan and just take the loss? I ask because, let’s say the current estate tax exclusion is $5million, and the estate holds a say $2.5 million note secured by some property. And since you (debtor) refuse to pay, it’s no longer “performing”… What amount is used concerning this note towards the estate tax exclusion computation? The original amount written on the loan ($2.5 million) or the current face value of the note ($0, since it’s no longer performing since you, the debtor, refuse to pay off the note)…More importantly, does the IRS require you (creditor) to actually try to collect on a loan. Or could you just eat the loan? And BTW, are loan forgiveness still not a taxable event in the current environment?
You know, I’m just asking because, well just asking. If it’s asinine to ask, so be it.[/quote]
Always scheming, aintcha?
No bad debt deduction unless there is a bonafide debt. A debt to yourself doesn’t quite qualify.
The debt forgiveness is a pretty damn good catch on your part. The tax relief for debt forgiveness on a primary residence only runs through 2012, then reverts to the old law. Debt forgiven will be taxable to a solvent taxpayer.
Extra bonus scheming penalty for you too. Even if it otherwise would work, it’s worse than a wash. Bad debt deduction is a capital loss, limited to $3,000 a year (over and above capital gains.) Debt forgiveness is ordinary income. So you’ll pay even more current taxes than if the debt was just cancelled.
(As an aside, when doing estate planning, debts like this should NEVER be forgiven in a will. It creates taxable income for the beneficiary. Rather, the debt should either be specifically identified for inheritance, or not mentioned at all, and will be part of the remainder estate and can be dealt with as an estate distribution.)
Participant[quote=flu][quote=Diego Mamani]That’s simple FLU… Once you inherit the note, you own the property free and clear.
But if your wife has siblings, they may jointly inherit the note… in which case you still have to pay back the loan.[/quote]
But let’s just assume that right now, there are no siblings to share the estate….If you (as the debtor) refuse to pay the loan, could you (as the creditor) simply not call the loan and just take the loss? I ask because, let’s say the current estate tax exclusion is $5million, and the estate holds a say $2.5 million note secured by some property. And since you (debtor) refuse to pay, it’s no longer “performing”… What amount is used concerning this note towards the estate tax exclusion computation? The original amount written on the loan ($2.5 million) or the current face value of the note ($0, since it’s no longer performing since you, the debtor, refuse to pay off the note)…More importantly, does the IRS require you (creditor) to actually try to collect on a loan. Or could you just eat the loan? And BTW, are loan forgiveness still not a taxable event in the current environment?
You know, I’m just asking because, well just asking. If it’s asinine to ask, so be it.[/quote]
Always scheming, aintcha?
No bad debt deduction unless there is a bonafide debt. A debt to yourself doesn’t quite qualify.
The debt forgiveness is a pretty damn good catch on your part. The tax relief for debt forgiveness on a primary residence only runs through 2012, then reverts to the old law. Debt forgiven will be taxable to a solvent taxpayer.
Extra bonus scheming penalty for you too. Even if it otherwise would work, it’s worse than a wash. Bad debt deduction is a capital loss, limited to $3,000 a year (over and above capital gains.) Debt forgiveness is ordinary income. So you’ll pay even more current taxes than if the debt was just cancelled.
(As an aside, when doing estate planning, debts like this should NEVER be forgiven in a will. It creates taxable income for the beneficiary. Rather, the debt should either be specifically identified for inheritance, or not mentioned at all, and will be part of the remainder estate and can be dealt with as an estate distribution.)
Participant[quote=PatentGuy]
Do any of you really believe that if taxed were raised taxes as high as possible on “the rich” (how about a marginal tax rate of 98% on all income higher than what PatentGuy makes?), the deficit will be any less five or ten years from now? [/quote]
Do you really believe that if taxes were lowered as much as possible on “the rich” (how about a marginal rate of 1% on all income over what I make), the deficit will be any less five or ten years from now?
Now that we have rediculous straw men arguments out of the way, please continue the discussion.
Participant[quote=PatentGuy]
Do any of you really believe that if taxed were raised taxes as high as possible on “the rich” (how about a marginal tax rate of 98% on all income higher than what PatentGuy makes?), the deficit will be any less five or ten years from now? [/quote]
Do you really believe that if taxes were lowered as much as possible on “the rich” (how about a marginal rate of 1% on all income over what I make), the deficit will be any less five or ten years from now?
Now that we have rediculous straw men arguments out of the way, please continue the discussion.
Participant[quote=PatentGuy]
Do any of you really believe that if taxed were raised taxes as high as possible on “the rich” (how about a marginal tax rate of 98% on all income higher than what PatentGuy makes?), the deficit will be any less five or ten years from now? [/quote]
Do you really believe that if taxes were lowered as much as possible on “the rich” (how about a marginal rate of 1% on all income over what I make), the deficit will be any less five or ten years from now?
Now that we have rediculous straw men arguments out of the way, please continue the discussion.
Participant[quote=PatentGuy]
Do any of you really believe that if taxed were raised taxes as high as possible on “the rich” (how about a marginal tax rate of 98% on all income higher than what PatentGuy makes?), the deficit will be any less five or ten years from now? [/quote]
Do you really believe that if taxes were lowered as much as possible on “the rich” (how about a marginal rate of 1% on all income over what I make), the deficit will be any less five or ten years from now?
Now that we have rediculous straw men arguments out of the way, please continue the discussion.
Participant[quote=PatentGuy]
Do any of you really believe that if taxed were raised taxes as high as possible on “the rich” (how about a marginal tax rate of 98% on all income higher than what PatentGuy makes?), the deficit will be any less five or ten years from now? [/quote]
Do you really believe that if taxes were lowered as much as possible on “the rich” (how about a marginal rate of 1% on all income over what I make), the deficit will be any less five or ten years from now?
Now that we have rediculous straw men arguments out of the way, please continue the discussion.
Participant[quote=sreeb]
1) If interest rate only go up by a factor of 4 (not unrealistic given how low they are now), we are completely screwed.[/quote]
Well, maybe not exactly. It would be detrimental, but US Govt bonds aren’t callable. I believe average maturity on outstanding government debt is about 5 years. (I have no idea how the inter-governmental debt figures into that average, like the special issue bonds for SS OAB.) So if rates go up by a factor of 4, interest paid will not suddently get quadrupled. The interest on long-term debt won’t change at all. It will increase expenditures for new bonds, but not by a factor of 4. Some of those bonds coming due were issued 10 years ago and more when rates were significantly higher than they are today.
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