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  1. #1
    michael147 is offline Member
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    A sentence about the US estate tax

    There's an estate tax that taxes money that had already been taxed once or twice in someone's lifetime.

    What does it mean? I'm confused.

  2. #2
    Gillnetter is offline Key Member
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    Re: A sentence about the US estate tax

    Quote Originally Posted by michael147 View Post
    There's an estate tax that taxes money that had already been taxed once or twice in someone's lifetime.

    What does it mean? I'm confused.
    A. Person A earns some money
    B. That money is taxed - a portion of the money is to be sent to the government by Person A
    C. Person A dies and leaves his estate (his money and other assets) to Person B
    D. Person B is required to pay a tax on the money and other valuable assets he received from Person A

    In the US, when a person dies and the value of his estate (his total assets) is above a certain figure, the person receiving the assets is required to pay a tax on the assets. This amounts to the assets being taxed once (Person A paid originally) when earned, and again when the estate is passed on (Person B pays another tax).

  3. #3
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    Barb_D is offline Moderator
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    Re: A sentence about the US estate tax

    An estate tax is tax on what one person inherits from another person.

    If I earn $100 million dollars, my income is taxed as I earn it. If I die, and my daughter inherits it, she will pay "estate tax" on that.

    The US is not the only nation with an estate tax.
    I'm not a teacher, but I write for a living. Please don't ask me about 2nd conditionals, but I'm a safe bet for what reads well in (American) English.

  4. #4
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    bhaisahab is offline Moderator
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    Re: A sentence about the US estate tax

    Quote Originally Posted by Barb_D View Post
    An estate tax is tax on what one person inherits from another person.

    If I earn $100 million dollars, my income is taxed as I earn it. If I die, and my daughter inherits it, she will pay "estate tax" on that.

    The US is not the only nation with an estate tax.
    In the UK it's called "Inheritance Tax". It applies to cash or assets valued at above £325,000. In other words, one can inherit up to £325,000 tax free. Surviving spouses are exempt from Inheritance Tax..

  5. #5
    SoothingDave is offline VIP Member
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    Re: A sentence about the US estate tax

    If the money was earned by a corporation, it could be taxed as corporate income, then taxed as personal income and finally taxed as part of an estate.

  6. #6
    michael147 is offline Member
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    Re: A sentence about the US estate tax

    Thank you for your answers, especially #2 & #3's. I got it.

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