Percentage of Net Worth

kailes2872 · #1 07-27-2018, 10:22 AM

I ask this question as only theoretical (as my wife and I were discussing last night)...

For the high net worth folks, I ask this -

If you are covered up to 5 million on inheritance tax, and then everything above 5 million has a death tax rate of approximately 40%, then 12 million becomes 9 million really quickly (2.8 million in taxes above 5 million).

I know that cards and collectibles are assets but it becomes a little more blurry as there is not a hard and fast amount in mutual fund account that has a set tax.

If over the next 30 years, a high grade green Cobb is purchased, along with some Ruth's, Mantles, etc., and that 12 million dollars in the pile is now 9 and the 2.8 million dollar tax bill is now 1.6 million but ownership transfer has been given to the kids over time, does that help? Or is it simply changing the shape of money and in the end money, property, collectibles, whatever are tallied up and the inheritance tax is given based upon that total above 5 million?

I was using this analogy with my wife last night as a real good reason for me to up the ante in my collection in the coming years as a way to keep assets in the family instead of in Washington, but if it doesn't matter, I will need to come in at a different angle.

Thanks!

ALR-bishop · #2 07-27-2018, 10:27 AM

Less than 1 %, but it is my favorite part.

btcarfagno · #3 07-27-2018, 12:19 PM

Quote:

Originally Posted by kailes2872

I ask this question as only theoretical (as my wife and I were discussing last night)...

For the high net worth folks, I ask this -

If you are covered up to 5 million on inheritance tax, and then everything above 5 million has a death tax rate of approximately 40%, then 12 million becomes 9 million really quickly (2.8 million in taxes above 5 million).

I know that cards and collectibles are assets but it becomes a little more blurry as there is not a hard and fast amount in mutual fund account that has a set tax.

If over the next 30 years, a high grade green Cobb is purchased, along with some Ruth's, Mantles, etc., and that 12 million dollars in the pile is now 9 and the 2.8 million dollar tax bill is now 1.6 million but ownership transfer has been given to the kids over time, does that help? Or is it simply changing the shape of money and in the end money, property, collectibles, whatever are tallied up and the inheritance tax is given based upon that total above 5 million?

I was using this analogy with my wife last night as a real good reason for me to up the ante in my collection in the coming years as a way to keep assets in the family instead of in Washington, but if it doesn't matter, I will need to come in at a different angle.

Thanks!

This

Spoken as an accountant not a high net worth individual...

Rich Falvo · #4 07-27-2018, 12:35 PM

Edited to add...Blongley beat me to it.

The federal estate tax exclusion amount basically doubles to around $11.2 starting in 2018, right? (At least until 2025 if not extended further). I don't think I'll ever have an issue at even the lower level...

BLongley · #5 07-27-2018, 12:33 PM

It's $5.6mm per person, $11.2mm per couple for 2018.

QUOTE=kailes2872;1798545]I ask this question as only theoretical (as my wife and I were discussing last night)...

For the high net worth folks, I ask this -

If you are covered up to 5 million on inheritance tax, and then everything above 5 million has a death tax rate of approximately 40%, then 12 million becomes 9 million really quickly (2.8 million in taxes above 5 million).

I know that cards and collectibles are assets but it becomes a little more blurry as there is not a hard and fast amount in mutual fund account that has a set tax.

If over the next 30 years, a high grade green Cobb is purchased, along with some Ruth's, Mantles, etc., and that 12 million dollars in the pile is now 9 and the 2.8 million dollar tax bill is now 1.6 million but ownership transfer has been given to the kids over time, does that help? Or is it simply changing the shape of money and in the end money, property, collectibles, whatever are tallied up and the inheritance tax is given based upon that total above 5 million?

I was using this analogy with my wife last night as a real good reason for me to up the ante in my collection in the coming years as a way to keep assets in the family instead of in Washington, but if it doesn't matter, I will need to come in at a different angle.

Thanks![/QUOTE]

BLongley · #6 07-27-2018, 12:35 PM

It's $5.6mm per person, $11.2mm per couple for 2018.

Quote:

Originally Posted by kailes2872

I ask this question as only theoretical (as my wife and I were discussing last night)...

For the high net worth folks, I ask this -

If you are covered up to 5 million on inheritance tax, and then everything above 5 million has a death tax rate of approximately 40%, then 12 million becomes 9 million really quickly (2.8 million in taxes above 5 million).

I know that cards and collectibles are assets but it becomes a little more blurry as there is not a hard and fast amount in mutual fund account that has a set tax.

If over the next 30 years, a high grade green Cobb is purchased, along with some Ruth's, Mantles, etc., and that 12 million dollars in the pile is now 9 and the 2.8 million dollar tax bill is now 1.6 million but ownership transfer has been given to the kids over time, does that help? Or is it simply changing the shape of money and in the end money, property, collectibles, whatever are tallied up and the inheritance tax is given based upon that total above 5 million?

I was using this analogy with my wife last night as a real good reason for me to up the ante in my collection in the coming years as a way to keep assets in the family instead of in Washington, but if it doesn't matter, I will need to come in at a different angle.

Thanks!

kailes2872 · #7 07-27-2018, 01:10 PM

Quote:

Originally Posted by BLongley

It's $5.6mm per person, $11.2mm per couple for 2018.

Thanks! This just made my day as I did not realize this changed!

ashes13 · #8 07-28-2018, 04:54 AM

Actually the estate tax exemption is much higher now. $11.18 million per person or almost $22.4 million for a married couple so unless you and your wife have over $22.4 million of assets no federal estate taxes.

this will last until the year 2025 where it could sunset or be extended depending on congress

this from a forbes article

The tax bill, passed by the House and Senate yesterday, temporarily doubles the exemption amount for estate, gift and generation-skipping taxes from the $5 million base, set in 2011, to a new $10 million base, good for tax years 2018 through 2025. The exemption is indexed for inflation, so it looks like an individual can shelter $11.2 million in assets from these taxes. Another federal estate law provision called portability lets couples who do proper planning double that exemption. So, a couple could exclude $22.4 million for 2018. Watch out: The law’s sunset means that, absent further Congressional action, the exemption amount would revert to the $5 million base, indexed.

Dpeck100 · #9 07-27-2018, 12:56 PM

Quote:

Originally Posted by kailes2872

I ask this question as only theoretical (as my wife and I were discussing last night)...

For the high net worth folks, I ask this -

If you are covered up to 5 million on inheritance tax, and then everything above 5 million has a death tax rate of approximately 40%, then 12 million becomes 9 million really quickly (2.8 million in taxes above 5 million).

I know that cards and collectibles are assets but it becomes a little more blurry as there is not a hard and fast amount in mutual fund account that has a set tax.

If over the next 30 years, a high grade green Cobb is purchased, along with some Ruth's, Mantles, etc., and that 12 million dollars in the pile is now 9 and the 2.8 million dollar tax bill is now 1.6 million but ownership transfer has been given to the kids over time, does that help? Or is it simply changing the shape of money and in the end money, property, collectibles, whatever are tallied up and the inheritance tax is given based upon that total above 5 million?

I was using this analogy with my wife last night as a real good reason for me to up the ante in my collection in the coming years as a way to keep assets in the family instead of in Washington, but if it doesn't matter, I will need to come in at a different angle.

Thanks!

Technically everything applies. Many do play with the numbers when it comes to jewelry, art, collectibles and personal belongings.

In theory it would be easy to gift all of these things and pretend you never owned them but if the IRS does an audit on your estate and there is discovery of the gifts they will go against your lifetime exemption and you might face fines for attempting to defraud the government.

I had a client pass away in 2012 with a large estate and they said the IRS got very picky on the jewelry and they had to get real appraisals for it all. If you bought a high profile collectible with traceable funds and have a taxable estate you are exposing yourself to risk but it isn't guaranteed you will be caught.

If a guy like Marshal Fogel for example who has displayed his Mantle were to try and pretend he didn't own it that would be a bad idea.

View Poll Results: What percentage of your net worth consists of baseball cards?
Under 1%	70	20.17%
1-5%	105	30.26%
6-10%	69	19.88%
11-25%	59	17.00%
26-50%	24	6.92%
51% or more	20	5.76%
Voters: 347. You may not vote on this poll

Similar Threads
Thread	Thread Starter	Forum	Replies	Last Post
What Percentage of Vintage Cards Have Been Graded?	OldOriole	Net54baseball Vintage (WWII & Older) Baseball Cards & New Member Introductions	36	10-28-2017 01:44 AM
PSA pricing percentage differences from one grade to another???	whiteymet	Net54baseball Vintage (WWII & Older) Baseball Cards & New Member Introductions	4	10-11-2017 03:58 PM
What Percentage of the 18,000+ MLB Players are represented in Your Collection?	clydepepper	Net54baseball Vintage (WWII & Older) Baseball Cards & New Member Introductions	7	11-07-2014 08:18 AM
What percentage of your net worth?	Cardboard Junkie	WaterCooler Talk- Off Topics	15	07-04-2014 08:37 AM
Sniping win percentage - What is yours?	Archive	Net54baseball Vintage (WWII & Older) Baseball Cards & New Member Introductions	13	09-02-2008 08:05 PM