US Estate Tax Exemptions

You are ignoring the estate tax.

Not sure why you get downvoted. Most people with more money and especially on his level have only little exposure to income taxes. Even the estate taxes will not have a big impact when doing proper tax planning.

Oops, wrong wording. You are correct, you are only taxed on any money passed down after the first 11.18 million.

It's tied to the estate tax exclusion. The first ~$12million of estate isn't taxed, and you can give that money away before or after you die.

> Most of it, yes, in the form of estate taxes.Estate taxes in the US are 40% and the first ~$5 million in value is exempt. So its impossible to lose most of any estate to estate taxes in the US, and very few estates (0.14% [1]) are subject to any estate tax at all.[1] http://www.cbpp.org/files/estatetaxmyths.pdf

You have to pay estate tax on gifts too. Otherwise rich people could avoid estate tax by giving their assets to their kids before they died.

It's about inheritance taxes. Without a limit, an easy loophole would be that a parent could give all their money to their kids before they die and avoid inheritance tax entirely. (Instead, they need a more complicated loophole using a trust.)But federal inheritance tax doesn't kick in until you leave over 11 million to an individual, and many states don't have an inheritance tax, so most people won't need to worry about this. (Not legal advice, states differ, etc.)

Estate taxes don't exist for 99.7% of people. A married couple can exempt the first $24M of their estate from any Federal taxes.https://www.kiplinger.com/taxes/601639/estate-tax-exemption-...Mind you, this also avoids a ton of tax that would otherwise be due had they not died via the step-up in basis... it's a massive giveaway to

Gifts above $14k are not taxed in the US. Currently, you have to give away $13M+ in your lifetime before you are subject to estate tax.

27 million is completely untaxed. Beyond that you can use trusts to avoid the estate tax.