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New York rich face tax surprise when they die: Tax rate of 164 percent on portions of their estates
CNBC ^ | 04/08/2014 | Robert Frank

Posted on 04/08/2014 2:20:29 PM PDT by SeekAndFind

If you're a New York multimillionaire, you now have another incentive to stay alive.

A change this month in New York's estate tax, which was billed as tax relief for the wealthy, contains a hidden wrinkle that could leave some multimillionaires with a much bigger surprise tax upon their death. Certain estates could even wind up with a tax rate of 164 percent on portions of their estates, according to one tax expert.

The changes were intended to ease the tax bill for wealthy New Yorkers and prevent them from fleeing to lower-tax states. A report from the Tax Foundation found that New York had the highest tax burden in the country as a percentage of state income. It found that New Yorkers spent 12.6 percent of their per capita income in 2011 on state and local taxes.

nstead of lowering the tax bill, the estate tax change could raise it.

"It's nonsensical," said Kevin Matz, an accountant and attorney in White Plains, N.Y. "The governor said this is about making New York a better climate for the wealthy. It's had the opposite effect."

On its face, the new law seems like tax relief. Under the previous law, New Yorkers paid estate taxes of 3.06 percent to 16 percent on the value of estates over $1 million. The new law raises that exclusion to $2.062 million this year and gradually increases it to more than $5 million by 2017.

But because the law also phases out certain credits related to federal taxes, people who have estates valued just above the $2 million threshold could get massive estate tax bills.

(Excerpt) Read more at cnbc.com ...


TOPICS: Culture/Society; Government; News/Current Events; US: New York
KEYWORDS: andrewcuomo; billdeblasio; chirlanemccray; deathtax; estatetax; newyork; newyorkcity; taxes

1 posted on 04/08/2014 2:20:29 PM PDT by SeekAndFind
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To: SeekAndFind

RE: people who have estates valued just above the $2 million threshold could get massive estate tax bills.

If you own property in Manhattan or certain parts of Brooklyn (which you bought decades ago), at the rate the property values are rising, $2 Million is a threshold you can easily reach.


2 posted on 04/08/2014 2:22:21 PM PDT by SeekAndFind (If at first you don't succeed, put it out for beta test.)
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To: SeekAndFind
The changes were intended to ease the tax bill for wealthy New Yorkers and prevent them from fleeing to lower-tax states.

IT WON'T 'PREVENT' ANYTHING........It just gives them a new reason...................

3 posted on 04/08/2014 2:24:05 PM PDT by Red Badger (LIberal is an oxymoron......................)
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To: SeekAndFind

New York State is on it’s own, freaking Commies... serves them right for chasing away the conservatives, that is ? if there are any left there.


4 posted on 04/08/2014 2:26:43 PM PDT by American Constitutionalist
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To: AdmSmith; AnonymousConservative; Berosus; bigheadfred; Bockscar; cardinal4; ColdOne; ...

Cuomo sez, you don’t think like me, get out.


5 posted on 04/08/2014 2:28:46 PM PDT by SunkenCiv (https://secure.freerepublic.com/donate/)
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To: SeekAndFind

How can you pay more than 100%?


6 posted on 04/08/2014 2:29:56 PM PDT by smokingfrog ( sleep with one eye open (<o> ---)
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To: SeekAndFind

THE BEATLES
“Taxman”

(1,2,3,4

Hrmm!

1,2...

1,2,3,4.)

Let me tell you how it will be
There’s one for you, nineteen for me
Cos I’m the taxman, yeah, I’m the taxman

Should five per cent appear too small
Be thankful I don’t take it all
Cos I’m the taxman, yeah I’m the taxman

If you drive a car, I’ll tax the street
If you try to sit, I’ll tax your seat
If you get too cold I’ll tax the heat
If you take a walk, I’ll tax your feet

Taxman!
Cos I’m the taxman, yeah I’m the taxman

Don’t ask me what I want it for (Aahh Mr. Wilson)
If you don’t want to pay some more (Aahh Mr. Heath)
Cos I’m the taxman, yeah, I’m the taxman

Now my advice for those who die
Declare the pennies on your eyes
Cos I’m the taxman, yeah, I’m the taxman

And you’re working for no one but me
Taxman!


7 posted on 04/08/2014 2:34:56 PM PDT by Red Badger (LIberal is an oxymoron......................)
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To: SeekAndFind

8 posted on 04/08/2014 2:36:11 PM PDT by Vaquero (Don't pick a fight with an old guy. If he is too old to fight, he'll just kill you.)
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To: SeekAndFind

“Rich” New Yorkers should realize that today’s tax relief will be tomorrow’s tax loophole. And it will be closed after you’ve been vilified for receiving such a benefit from the state.


9 posted on 04/08/2014 2:51:31 PM PDT by paint_your_wagon
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To: SeekAndFind

A movement must be started to reform the power of the national government and the states to “tax and spend.” The politicians cannot stop and will lead us into financial ruin all the while believing they can explain away the resulting chaos.


10 posted on 04/08/2014 2:56:00 PM PDT by AEMILIUS PAULUS (It is a shame that when these people give a riot)
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To: smokingfrog
How can you pay more than 100%?

Involuntary servitude for your heirs.

11 posted on 04/08/2014 2:56:56 PM PDT by Navy Patriot (Join the Democrats, it's not Fascism when WE do it, and the Constitution and law mean what WE say.)
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To: smokingfrog
How can you pay more than 100%?

They rip the gold fillings out of your teeth, then go after your heirs' gold fillings too.

12 posted on 04/08/2014 2:58:02 PM PDT by Cementjungle
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To: smokingfrog
How can you pay more than 100%?

If that portion of your estate is valued at $100K, then your tax bill would be for $164k.

Hey, it is only your fair share, right?

13 posted on 04/08/2014 3:00:01 PM PDT by BwanaNdege
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To: BwanaNdege

Why anyone would live in ny is beyond me!


14 posted on 04/08/2014 3:05:12 PM PDT by bicyclerepair (The zombies here elected alcee hastings. TERM LIMITS ... TERM LIMITS)
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To: Cementjungle
They invade the capital upon which income is based. For example, if one has $100 in the bank earning 3% per year they would take the 3% and invade the $100.
15 posted on 04/08/2014 3:05:14 PM PDT by AEMILIUS PAULUS (It is a shame that when these people give a riot)
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To: smokingfrog
How can you pay more than 100%?

Explanation

16 posted on 04/08/2014 3:11:58 PM PDT by SC DOC
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To: smokingfrog
How can you pay more than 100%?

Explanation

17 posted on 04/08/2014 3:11:58 PM PDT by SC DOC
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To: SeekAndFind

If you think one of these folks is going to pay a dollar in taxes then I have a huge lake in the desert to sell you. No way do multi-millionaire pay taxes when they die. They have irrevocable trusts. Sorry New York. Try harder next time.


18 posted on 04/08/2014 3:16:04 PM PDT by napscoordinator ( Santorum-Bachmann 2016 for the future of the country!)
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To: SeekAndFind

This state is on it’s deathbed.


19 posted on 04/08/2014 3:52:07 PM PDT by The Mayor (Honesty means never having to look over your shoulder.)
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To: SeekAndFind

I thought no NY millionaire EVER died there.
I thought they all died in Florida?


20 posted on 04/08/2014 3:53:30 PM PDT by nascarnation (Toxic Baraq Syndrome: hopefully infecting a Dem candidate near you)
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To: SeekAndFind

Dig ‘em up and put ‘em back to work until that additional 64% is paid off!


21 posted on 04/08/2014 4:00:22 PM PDT by G Larry (There's the Beef!)
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To: G Larry

They say you can’t take it with you, but the government keeps coming up with more incentives to do so.


22 posted on 04/08/2014 4:04:20 PM PDT by AZLiberty (No tag today.)
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To: bicyclerepair
Why anyone would live in ny is beyond me!

My sister-in-law used to say that the best thing about NYC was the Tappan Zee bridge....bypass the whole city on the way to New England.

23 posted on 04/08/2014 4:17:13 PM PDT by BwanaNdege
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To: smokingfrog

“How can you pay more than 100%?”

It’s more than 100% of the amount that is over a particular thresold. I’m not sure if the article is clear or not, I’m too lazy to read it carefully.

But one problem with estates is valuation, your estate might be “worth” a lot of money, but if it is property (real or portable) it’s not like you’ve got that “value” in cash to pay the bill.

And who is to say how quickly or for how much any given piece of property can be sold?


24 posted on 04/08/2014 4:28:06 PM PDT by jocon307
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To: SeekAndFind

I’m sure that wealthy politically connected liberals will get an exemption.


25 posted on 04/08/2014 4:33:00 PM PDT by logic101.net (How many more children must die on the altar of gun control?)
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To: smokingfrog
How can you pay more than 100%?

It's not on the entire estate, so the over 100% portion ends up hitting another part.
26 posted on 04/08/2014 4:41:11 PM PDT by 98ZJ USMC
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To: All

literally:

ESCAPE from NY


27 posted on 04/08/2014 4:41:35 PM PDT by longtermmemmory (VOTE! http://www.senate.gov and http://www.house.gov)
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To: SeekAndFind

2 million isn’t all that rich, by any stretch. A nice house, two working spouses with modest investment portfolios and IRA’s and that covers a hell of a lot of people.


28 posted on 04/08/2014 5:00:38 PM PDT by Ramius (Personally, I give us one chance in three. More tea anyone?)
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To: SeekAndFind

All you have to have is a house in Westchester county, an IRA, some savings and life insurance and you are paying this confiscation of wealth tax. Screw this state. Starve the beast. Everyone leave now while you still have money in your hands.

Cuomo does not even own a house in NY. He lives with his bimbo.

Will the last working New Yorker please turn off the lights when you leave?


29 posted on 04/08/2014 6:44:04 PM PDT by NoKoolAidforMe (I'm clinging to my God and my guns. You can keep the change.)
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To: American Constitutionalist

There are many of us left, but in our case, not any longer than need be.

My kids have all left and once mr. mm can retire, I want out, too.


30 posted on 04/21/2014 4:52:29 AM PDT by metmom (...fixing our eyes on Jesus, the Author and Perfecter of our faith....)
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To: longtermmemmory
I left in 2000. It was the sweetest moment of my life.

Soon enough, though, I will have to escape from the United States.

31 posted on 04/21/2014 5:05:00 AM PDT by Lazamataz (Early 2009 to 7/21/2013 - RIP my little girl Cathy. You were the best cat ever. You will be missed.)
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To: metmom

My best advice ? if you can handle the hot weather and tornadoes ? move south.... like South Carolina.


32 posted on 04/21/2014 2:36:15 PM PDT by American Constitutionalist
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To: metmom
My kids have all left and once mr. mm can retire, I want out, too.

Think Virginia. I am paying 1/3 the property taxes I paid in NY. We still have 4 seasons, the snow is really at a minimum and if you stay away from the coast the real estate prices are reasonable and you don't have to worry about hurricanes.

33 posted on 04/22/2014 6:07:26 AM PDT by verga (Poor spiritual health is often manifested with poor physical health.)
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