Does ObamaCare Have an Inheritance Tax?

My friend told me that when I die my estate will have to pay 50 percent to the federal government to fund obamacare. Is that true.

Answer

The ACA raises the estate tax by 3.8%. The current tax for estates is about 40% with a $5.43 million dollar exclusion for 2015. This means the 40% applies to money above that exclusion. It's sometimes called a death tax, but one has to be passing along a large sum of money for it to take effect. See a list of all 21 ObamaCare taxes here.

Net Investment Income Tax

A new Net Investment Income Tax went into effect on Jan. 1, 2013. The 3.8 percent Net Investment Income Tax applies to individuals, estates and trusts that have certain investment income above certain threshold amounts. On Nov. 26, 2013, the IRS and the Treasury Department issued final regulations, which provide guidance on the general application of the Net Investment Income Tax and the computation of Net Investment Income. In addition, on Nov. 26, 2013, the IRS and the Treasury Department issued proposed regulations on the computation of net investment income as it relates to certain specific types of property. Comments may be submitted electronically, by mail or hand delivered to the IRS. For additional information on the Net Investment Income Tax, see our questions and answers.