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Originally Posted by firstdown
Your right and when they realise that their is an issues and now are much older and now need a large life policy the premimums can be THOUSANDS PER MONTH and allot of times it is not affordable. You also think that its ok for the goverment to put such a burden on small family busnesses? Remember the tax is based on the value of the business and not the income that the family makes off the business. So if your a small business makeing X and you have a plant with 20 workers that the goverment says is worth 5,000,000 then thats what your taxed on even though you may only make $120,000 per year.
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If the business purchases life/key-man insurance on the CEO/President/Founder, it's deductible. A few thousand dollars a year is not going to tank a business worth millions. Also, the estate tax only affects individuals worth $2M (including his/her interest in any business he/she owns in part or whole). So, it's not as though the guy who runs the candy shop or down the street or his family is typically unaffected by the estate tax.