There are limits and exclusions that apply, and there are differences between Federal and State tax laws. If you do have an estate/inheritance of some value, it is advisable to consult an estate planner well before needed to ensure you pay the proper (minimum) amount.
Here'* a web site for example: http://www.bankrate.com/brm/itax/Edi...g/basic_3a.asp
Also, here'* a quote from another site: http://moneycentral.msn.com/quickref...&Topic=3&Sub=2
"How are the estate tax rates changing as a result of the Tax Relief Act of 2001?
The estate tax rates decrease each year, and the exemption amounts increase until 2010 when the estate tax is repealed completely. (A year later, the tax is supposed to come back, but ití* fair to expect that a Republican-controlled Congress wonít let that happen.)
For 2005, the exemption amount is $1.5 million, and the top tax rate is 48%. By 2009, the exemption amount will be $3.5 million, and the top tax rate will be 45%.
Most of us won't be faced with these issues, but it is important to those of us whose families have worked hard to accumulate financial security and for those of us that would like to. One example of why many of us oppose the confiscation of wealth by the government through estate and inheritance taxes is the example of the family owned business.
Whether a family farm or a corner store, it'* not unusual for a family to live comfortablely, if not lavishly, on the income from a family business. Some family farms may make say, $100,000.00 per year. But when the last parent passes and the family assets are inventoried it'* not hard to break the $1.5 million dollar level. The typical farm is going to be 1600+ acres, which at $1000.00 per acre, is already $1.6 mil, add in the house, barns, tractors and related assets and all of a sudden the kids have to come up with $500,000.00 for the tax man for a business that only produces that much cash flow every 5 years, not counting what they need to live on while they run the farm. Many families end up having to sell out, lose half their value, and find work in town just so they can pay the tax man.
Whether your Father and Grandfather built a farm or an auto body shop business, that'* just not right; whether you think their kids deserve it or not is also beside the point. And while you feel sympathy for the construction worker paying his/her taxes, remember that the assets built by the family were also taxed at whatever the prevailing tax rate was when those assets were accumulated.
Inheritance and Estate taxes are bad, and we Conservatives take some pride in the progress that has been made in getting rid of them.