How to Fix Social Security

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Originally Posted by Sheriff Gonna Getcha

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.

Well the reason that smaller businesses do not have this problem is because Bush (I think Bush) raised the value of an estate before it is subject to these taxes. I'm not sure if or what a business can write off because this is a tax on ones entire estate and not just for the business. So if a person has a personal worth of 1.2 mil and owns a business which is valued at 3.2 mil then his death tax is on 4.4 mil.. Also this problem usuall arises later in someones life and these policies can be very expensive not just the few thousand that you mentioned. I sell life Ins. (I do not do estate planning that whay I'm not sure of the write off) and was contacted by a customer who's Atty. did an estate planning and he determind that he needed 2 mil in life ins..This man made a good living but was not rich and provided around 20 jobs. He was older and had a few health issues and for him to purchase 2 mil in coverage was very very expensive and would only get more expensive as he got older. He did not purchase the policy (which he could not afford) and latter passed away. His family lost the business due to taxes and the city lost a tax paying buisness and 20 people lost their jobs. This was all because of the federal goverments death tax. Yes, maybe he waited too long but he never realized he was worth that much because he only made a small fraction of that. This happens everyday in the US.