In recent years, there has been a lot of talk concerning the necessity of the estate tax. One side favors the complete repeal of the legislation, while the other favors an increase in the amount taxed. But what is an estate tax? If you live in Napa County, CA, the answer may be more pertinent than you initially thought.
What is an estate tax?
Simply put, an estate tax is a governmental fee that comes when someone passes away. At the date of death, the IRS swoops in to take an assessment of their assets. Assets commonly included in this survey include:
- Cash on hand
- Real estate holdings
- Insurance policies
- Business interests
Those are the primary assets included in an estate tax by the IRS, but some exceptional cases may involve more far-reaching inclusions. The IRS determines the fair market value for each of these assets—not the value at purchase. The sum total of these items is called the “gross estate.” Estate taxes are determined based on the value of the gross estate.
The good news is that the estate tax form only needs to be filed if your gross estate is valued at $11.4 million in 2019 or $11.6 million in 2020.
On an annual basis, the estate tax accounts for roughly one half of one percent of the United States’ income.
The estate tax controversy
Still wondering specifically what is an estate tax in Napa County, CA? In the Golden State and the rest of the nation, the current federal estate tax stands at 40 percent of the gross estate. That number remains controversial. During his tenure, President Obama attempted to raise the estate tax to 68 percent. In this attempt, the president claimed that the estate tax was meant to help prevent the formation of American royalty. In taxing the money received at the time of death, the estate tax is theoretically designed to encourage merit, not wealth, as a means of social improvement.
Meanwhile, several GOP legislators have advocated the outright repeal of the estate tax. They argue people who fall under the auspices of the estate tax are taxed twice: once on an annual basis and once at the time of death. They pursue that argument by saying that the estate tax can be the death knell for small businesses that must be sold when they cannot afford to stay in business and pay the entirety of the estate tax.
The estate tax generates further controversy every year because it’s reportedly easy to get around with enough financial planning.
Estate appraisals professionals
If you find yourself pondering the minutia of how estate taxes work in Napa County, CA, then come to the team that can help fill you in on all the details. At County Appraisals Inc., we have a team of experts who can help you complete your estate tax valuation with minimal hassle.
Our experienced and courteous team also specializes in the appraisal of agricultural-related properties typically developed as vineyards, wineries, rural estates or single-family residences. You can count on us for comprehensive care from the moment you contact us. Visit us online or give us a call to find out how County Appraisals Inc. can help you.
Categorised in: Estate Appraisals
This post was written by Writer