Why aren't estates just taxed as income to the entity who it goes to? If my father croaks and leaves me $1m it should count as an additional $1m of income to me that year.
If it is $1m in property value, do you count that as still $1m of income? If so unless the child is in great financial situation with a lot of already liquid cash, they would be forced to sell part/all of the property to pay the taxes.
If a parent croaks and has a small business, mom and pop style. How would that be handled? If they had a small corner store making 100k/profit but has no assets vs a shop that sells very expensive equipment making 100k/yr in profit. But has hundreds of thousand in assets that would pass down.
- bank can lend money to pay for the tax - collateral is big enough
- if you cannot pay immediately, state can have share of your property
- ownership could be transferred from the parent to the children before death, so the tax is not that big
Amounts over 12M are indeed taxed twice.