How long does it take to withdraw money from the bank after paying inheritance tax in the United States?

The threshold for U.S. inheritance tax is higher and fluctuates according to the price index. In 1999, the starting point was US$650,000, and the tax rate was progressive, with the highest tax rate reaching 55%.

China has not yet levied this tax.

In 1916, the United States began to formally levy federal estate tax, and later levied related gift tax and generation-skipping estate transfer tax. Since 1977, estate tax and gift tax have used a unified tax rate.

When a U.S. citizen or permanent resident (commonly known as a green card holder) dies, no matter where on earth his estate is located, his heirs (other than his spouse) are obliged to declare the total amount of the estate, and Pay inheritance tax. For estates of non-citizens or non-permanent residents in the United States, whether the parties must pay U.S. estate and gift taxes after their death depends on whether the parties formally reside in the United States (Domicile). The definition of formal residence here is not related to the Immigration Bureau’s criteria for having the right of residence, and it is also different from the concept of resident in the Income Tax Act. The standard for residence under the Income Tax Act is the time the person has lived in the United States (more than 31 days), which is straightforward. The boundaries of formal residence in inheritance tax are actually blurred. For example, if the person concerned intends to live in the United States permanently but has no intention of returning to his place of origin, he becomes an official resident. However, if their personal relationships are still in their original place of residence, such people are not within the jurisdiction of the U.S. federal government for inheritance tax and gift tax.

The definition of inheritance includes movable and immovable property, tangible and intangible personal property. For example, currency is a tangible asset, while company shares, bonds, insurance policies, pensions, property rights in intellectual property, etc. are intangible assets. The value of each item in intangible assets is generally determined based on the fair market price at that time. For example, the actual value of real estate, stocks, etc. is determined based on the current market price. The joint inheritance tax uses an excess progressive system. The tax rate is divided into 18 levels, from 18% to 50%, which is directly related to the total value of the inheritance. The more the inheritance, the higher the tax rate.

However, not every penny of the total estate must pay estate tax. In other words, the net value of the estate is not equal to the taxable estate amount. The taxable estate is determined by deducting debts, funeral expenses, the amount inherited by a spouse, the amount donated to charity, and then deducting exemptions from the total value of the estate. Federal law provides that a certain amount, called an exemption, can be deducted from the net value of each estate or gift. If the amount of the inheritance or gift is less than the exemption amount, no tax will be paid. The U.S. Congress has twice voted to abolish the estate tax, stipulating that the estate tax and its related gift taxes and generation-skipping estate taxes will be gradually abolished within 10 years and replaced with a 20% capital gains tax. However, both times were eliminated by the then President Clinton vetoed. After taking office, President Bush announced a $1.6 trillion tax cut plan, which included the gradual elimination of the estate tax by 2010. Thanks to this plan, in terms of inheritance tax, the exemption amount in 2002 was increased from the original 750,000 yuan to 1 million yuan, and the top tax rate was reduced from 55% to 50%. This year's exemption amount is 1.5 million yuan, and the top tax rate is 48%. The rates of gift tax and inheritance tax are the same, but from 2002 to the present, the exemption amount is 1 million yuan.

When it comes to the ownership and distribution of inheritance, the notarized will of the property owner is the only evidence. If the property owner dies without a will, all assets in his name are automatically transferred to his spouse without having to pay inheritance tax; if the deceased does not have a will or a spouse, the estate will not automatically be inherited by the deceased's descendants or relatives, but must be passed through The court will decide. Usually the court will also distribute the amount based on the closeness of the blood relationship with the deceased, but all the costs of this process (about US$50,000-80,000) are paid by the heirs. Therefore, most Americans will draw up their wills as early as possible and clearly specify the method of inheritance distribution, such as what proportion will be left to their spouse or children, what proportion will be donated to society, etc.

Taxing first and then distributing is the most significant feature of the American inheritance tax system. The law stipulates that the estate administrator or executor must be responsible for paying the tax in cash within 9 months after the death of the original property owner before the estate can be distributed. If you don’t have enough money at the moment, you can’t apply for an extension of payment for more than 6 months. If someone left a taxable inheritance of more than 2 million US dollars in 2000, based on the estate tax rate of 49% in the 2 million to 2.5 million US dollars range at that time, his heirs would have to pay nearly one million in inheritance tax before they could receive the inheritance tax. to this property.

The larger the total amount of the taxable estate, the higher the tax rate and the more taxes the heirs will have to pay upfront. There is a beautiful manor on Long Island, New York, which turned out to be the mansion of U.S. President Heathford. The house is surrounded by mountains and the sea, with lush flowers and trees. It has now been turned into a public museum. It is because Heathford's descendants were not able to live up to expectations and could not come up with money to pay the inheritance tax. This kind of luxury house could not be sold in the short term, so they had to sell it to their ancestors. Donate the home you worked so hard to build.

We Chinese people say that it is only natural that the predecessors planted trees and the descendants enjoy the shade. There are also a considerable number of people in the United States - mostly people with traditional Asian and European cultural backgrounds - who oppose the continued imposition of inheritance taxes. They believe that as long as Americans are alive, they must pay income tax, property tax, consumption tax... and a series of various taxes. As a result, they have worked hard all their lives and finally saved some savings to leave to future generations, but they still have to pay What inheritance tax! On the one hand, inheritance tax is a double tax on the private property of the parties, which is unfair; on the other hand, it increases the pain of the heirs, which is immoral. Moreover, half of the tax on inheritances now comes from the class with a total estate value of less than US$5 million. These people are not considered rich. The taxable inheritance of the real rich after their death is only a small part of their property, so it is levied Inheritance tax also does little to evenly distribute social wealth. Furthermore, from the perspective of the heir, after paying the inheritance tax, his actual inherited inheritance has been greatly reduced, and he must also pay personal income tax. When the two taxes are added together, the combined tax rate can be as high as more than 70%! Much of private property was taken away by the federal government, reducing national capital and hampering savings, labor supply, and economic growth. According to statistics from the National Federation of Independent Business, 70% of farmers and family business owners are unable to pass their businesses to the next generation due to high inheritance taxes.

Opponents naturally want to evade inheritance tax. They can find all kinds of tips in the United States, a country with highly developed finance, insurance, and trust industries. For example, parents can donate a large amount of property to a hospital or a welfare foundation. The condition is that during the son's lifetime, the recipient of the donation must pay interest regularly at a very high interest rate until the son dies. Only when you meet can you truly own the money. As a result, the government cannot collect a penny of inheritance tax, but the son is still sitting firmly on the mountain of gold and silver. As another example, they can take advantage of the bank's federal 529 college savings plan. As soon as a child is born, open a 529 education fund savings account for them. The money deposited in the account year by year is handed over to a well-known investment management foundation for management and operation, and taxes are not paid until the money is withdrawn to pay tuition. In this way, parents or grandparents are the owners of the assets when opening an account. You can immediately save a lot of income tax by using this plan. When you withdraw money to pay tuition, the money will be in the name of the child, and the tax will be reported at the child's tax rate. However, if the student has no income, the tax rate will be much lower. Much more. In short, there are many ways to legally evade inheritance tax, and they are so varied that this article cannot go into detail.

In 2001, 120 top tycoons jointly advertised a petition on the editorial page of the New York Times, asking Congress to continue retaining the estate tax. Their reason is: After deducting the exemption amount, the number of people who should pay estate tax after death is less than 2% of the total U.S. population, indicating that estate taxes are highly concentrated on the wealthy. Imposing an inheritance tax will not only help promote donations to social charities, but will also help average social wealth. Eliminating the estate tax would reduce federal and state tax revenues by $30 billion a year, forcing authorities to increase tax rates on other items or cut spending on health care, Social Security, environmental protection and other programs. As a result, the heirs of millionaires or billionaires become richer, but the economic interests and social welfare of ordinary families who generally rely on salary income will be greatly damaged.

Warren Buffett, the famous American investor known as the God of Stocks and the major shareholder of the large insurance group Berkshire Hathaway, is one of the people who signed and supported this petition. He owns 36% of the company's shares, receives huge investment returns every year, and ranks second among the world's richest people with a personal asset worth US$30.5 billion. He once said publicly at the company's shareholders' meeting: The idea that as long as I was born into the right mother, I would be able to live a life of food and clothing, it damaged my concept of fairness. He went further in his petition and said: Eliminating the estate tax is a big mistake and extremely stupid. Eliminating the estate tax would create an aristocracy, equivalent to selecting the oldest son of the 2000 Olympic gold medalist to be the 2020 Olympian.

We think this is absolutely stupid as far as the games are concerned. The abolition of inheritance tax will create a wealth aristocracy in the country, which means that some people will control national resources based on hereditary rather than talent. In his will, he planned to donate 99% of his personal property to charity to provide scholarships for poor students and fund medical research in family planning.

Like Buffett, there is also the ace financier Soros, who made it clear that he will hand over his work in the investment foundation to his eldest son, but his inheritance will be donated to American public welfare institutions and Educational institutions in Eastern Europe; Joseph Jacobs, a giant in construction and engineering, announced that he will only leave his only daughter $1 million worth of shares in his company in the future, and most of the rest of his inheritance will be donated to charity; Bill Gates, known as the world's richest man The couple has more than $40 billion in assets to their name and has donated more than $25 billion so far. In his will, he planned to donate 98% of his estate to the Bill and Melinda Fund he founded and named after him and his wife. Association, used to research vaccines for AIDS and malaria, and provide aid to poor countries around the world...

Most of these people have Christian and Catholic backgrounds. They believe more in personal struggle and starting from scratch. Because most of them were not originally from rich families. The aforementioned Buffett started his fortune in the 1960s with US$130,000. According to statistics, only 10% of the wealth of American millionaires comes from inheritance. Rich people generally believe that true happiness comes from their own efforts. Letting their children and grandchildren reap the rewards for nothing is the stupidest thing a person can do in his life (Joseph Jacobs said). Two years ago, Raphael, the 23-year-old heir to the Rothschild family, a European financial family, died violently on the street due to drug abuse. This still serves as a warning to wealthy Americans in educating their children.

No matter how the two groups advocating the abolition and retention of the estate tax argue and argue based on their own interests, the plan to reduce the estate tax has already begun in the Bush administration's tax reduction bill. start up. However, this tax reduction bill is only valid for ten years, and most tax reduction projects will expire in 2010. Recently, some politicians and party members have stated that they are ready to push legislation in Congress to make Bush's tax cut bill permanent. White House officials also pointed out that even without new legislation, the Bush tax cut bill will continue. We do not believe that the U.S. Congress will impose an estate tax again. However, whether the estate tax and its related taxes will continue to be levied after 2010, or whether to restore the current tax rate, remains to be determined by the next new president.