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To: jttmab who wrote (14269)	6/6/2002 12:12:53 PM
From: The Philosopher	Read Replies (2) \| Respond to of 21057

If you don't have an estate tax, when is this deferred tax liability supposed to come due? When the income is actually realized. In the case of stocks, for example, when they're sold and somebody actually has money in their hands, not when they are moved from person to person without any money changing hands, by gift, inheritance, or otherwise. In the case of a business, home, or farm, when it is sold and somebody actually gets money. Until somebody actually gets money, they have nothing, really, to tax. Consider, for example, someone who had worked in Enron senior management and had accumulated a large position in Enron stock which was their major asset when they died in the summer of 2001. Their holding might, let's say, have been worth $3 million when they died (disregarding the valuation period option, which depending on when they died might be even worse). Assume they had another million in other values, house, furniture, boat, tc. They will owe tax, then, on $4 million That will be well in excess of $1 million. But until the is entered for probate and an executor appointed, the stock couldn't be sold. And an executor would be very brave to sell the stock at that time. Might, in some states, need court permission, which takes time to get. It's likely the stock wouldn't have been sold during the decline. So now, the estate likely has a tax bill of in excess of $1 million, which takes every penny of remaining estate. This is equitable?? Small businesses, farms, family homes are routinely lost because of the estate tax bill. In some cases it can be planned around, but that just means those without the means or savvy to do such planning, or in a case where the planning won't work, pay the bill for the others. The simple transfer of an asset from person A to person B, without any exchange of cash or other value, should be a tax free event. Taxes should only be imposed when the value is realized.