Anonymous asked in Business & FinanceTaxesOther - Taxes · 9 months ago

How do some rich people lose so much to tax?

For example, a man inherits $7.3M and he gets taxed. How does it work and how much roughly will he lose?

11 Answers

  • Erik
    Lv 7
    4 months ago

    Well, that depends.  But the government will take a big piece, because they can.  That's why it's better for super rich people to just GIVE everything away just before they die, so they can't take as much.

  • 9 months ago

    No-one gets taxed on anything they inherit. The tax is deducted before they get the money.

  • Amy
    Lv 7
    9 months ago

    The estate is taxed. Someone is appointed executor; in the case of an estate worth several million this is probably a professional. They calculate the total value of the estate, file a tax return, pay the tax and distribute the estate to the heirs.

    Let's say the man's mother had $16.8 million worth of property, had never married, and willed her estate to be split equally between her two children. 

    The exemption this year was $11.4 million, so the estate pays 40% tax on only the last $5.4 million. The estate is split into a $2.16 million payment and $7.32 million to each heir. The heirs do not owe any additional tax.

    The state in which the mother resided, or a state in which she owned property, may also impose an estate tax or inheritance tax.

  • 9 months ago

    THE ESTATE of the rich man is taxed ... and the rate and amount depend on the the current federal tax law and the laws of the state he lives in. Some points are the type of income / wealth (retirement funds, farm land, overseas investments, etc). How come ??? Politicians want the money. {The inheriting person does not owe any tax.}

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  • 9 months ago

    He will lose half off the top. That's the tax rate for those kinds of earnings, much less actually.

  • 9 months ago

    Nothing. Not roughly nothing. Exactly nothing. There is no federal tax on inheritances. If a person inherit money, the person doesn't get taxed on it in most states (there are a few states where the state taxes it but the federal government does not).

    If he later earned interest on the money, he would pay tax on that interest, just like anyone else.

    Contrary to popular opinion, the rich actually lose proportionally less to tax than the middle class does, because dividends and capital gains are taxed at a lower rate than income from employment.

  • 9 months ago

    An inheritance is not taxed.

  • Judy
    Lv 7
    9 months ago

    Where? In the US, for federal, if there's a tax it's paid by the estate. Some states have an inheritance tax - rates vary.

  • Anonymous
    9 months ago

    This using money other wise as dude fast,and money is lacking banks some how,whenfactories can,t build amoney,it is not a wise way continuing on wasting.

  • 9 months ago

    It works different ways and there are different percentages all over the world, neither do we all use US dollars. Generally you are allowed to make more money but you pay more tax because you can afford it, you are not made the same as a poor person because you pay more tax, you are still allowed to be successful and have trappings, mostly. In any case it's said that the worst off pay the most collectively because wealthier people employ bean counters to find loopholes for them.

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