[General] A sentence about the US estate tax

[michael147]

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.

 

[Gillnetter]

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).

 

[Barb_D]

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.

 

[bhaisahab]

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..

 

[SoothingDave]

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.

 

[michael147]

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