Right. And the only things I can think of are to make the property a gift to the US residents now, and hope they send him money for the rest of his life. Or, I suspect that if he gives them the property and strutures it as an annuity, that would also reduce or possibly even eliminate the estate tax issue.
There is no such thing as a "death tax."
Yes, there is. A tax imposed upon a decedent's estate is a death tax. Death is what triggers the tax.
But they are not taxing death itself - that would be difficult to do. They are taxing your property after you die.
Is real estate tax a January 1 tax, because it gets triggered every year?
Real estate tax is triggered when you acquire real estate, and is applied periodically.
Income tax is triggered when you have income, and is applied periodically.
The "Estate Tax" is triggered upon death, and your estate thus becomes a "Decedent's Estate". It is applied once, while they have a shot at it.
It's only a certain political faction and its spin doctors that call it a "death tax." They coined the term to frighten taxpayers - the vast majority of whom will never be subject to it - and pressure legislators to repeal it.
No, the existence of a taxable estate is what triggers the tax.
The estate tax is literally a millionaire's tax, since the exemption is $5.3 million. With rudimentary tax planning a married couple can shelter $10.6M so if your estate is less than that, there's no tax no matter how dead you are. I can't tell if the success of the "death tax" meme shows that people are innumerate, or just ignorant. (The fake stories about family farms were a nice touch.)
In any event, people who are rich enough that they have to plan for the estate tax can afford to do so.
ObTax: if a US person is a beneficiary of a foreign estate, what if anything are the US tax implications? If the estate includes securities, what is the beneficiary's basis?
But what is a taxable estate? A DECEDENT'S estate which exceeds a threshold amount. So, DEATH is a prerequisite. Just as income is a prerequisite for an income tax.
Note: the original federal tax in this regard was entitled a DEATH TAX, this is not a new name conjured up by some fringe group. And, the IRC still refers to DEATH TAX.
It is the use of the term "estate tax" which is deceptive and a bit of "sugar coating".
Moderator: don't worry, I am through with this thread.
========================================= MODERATOR'S COMMENT: There are three references to "death tax" in the Internal Revenue Code. Section 2014 refers to foreign death taxes. Section 2053 refers to foreign or state death taxes.
And Section 2642 refers to "federal estate tax or state death tax."
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