Wednesday, March 29, 2023
Can a billionaire die without anyone noticing?t
According to US Treasury data reports, a deposit of $7 billion was processed in the “estate and gift” tax category earlier this year. It was the highest collection of that kind since 2005. A Treasury spokesperson has confirmed that this was not a reporting error and privacy rules prevent government officials from discussing the specifics of the tax return.
Collections of estate and gift taxes have soared in recent years, likely due to the excess deaths of the elderly during the COVID-19 pandemic. However, high collection rates pale in comparison to this year.
Since 2017, estates have been taxed at 40%, with exemptions baked in. For example, the first $11.58 million of an estate is exempt from taxation. Based on the current rate, a $7 billion payment implies the estate or gift was roughly $17.5 billion. Some experts have estimated that by applying certain exemptions and other forms of avoidance, it’s possible that only 50% of the estate was taxable. This raises the projection to an estate worth roughly $35 billion.
Economists have come up with a few hypotheses to explain this payment. Perhaps Forbes missed a wealthy individual, or the gift was trigged by someone who died several years ago, or maybe it was a gift tax resulting from a divorce. Other options include a billionaire who made a $17.5 billion gift. Absent a leak of IRS data, we will likely never know.
For more information see Tim Fernholz “Can a billionaire die without anyone noticing?” Quartz, March 27, 2023.
https://lawprofessors.typepad.com/trusts_estates_prof/2023/03/can-a-billionaire-die-without-anyone-noticingt.html