If necessary for the inheritor to meet their tax obligations, sure. I'm sure there's a dozen different estate tax systems in place that tax professionals would know more about, but yes, liquidating assets would be one way for an interior to meet their tax obligations.
What would another way be? Say I inherited my parents company they built, entirely privately owned.
You would be charged a tax proportional to the value of that business. How you pay it is up to you. This is how estate tax is currently done in the US at the Federal level. Again, I'm not a tax professional, so if you want to know more I'd suggest looking into it yourself.
That would essentially mean family businesses, at least past a certain size, would be impossible. Or more realistically, they would just obfuscate the ownership structure.
Which is why estate taxes have caps such that people who own small family businesses are rarely affected.
What happens to the wealth beyond the cap?
It's taxed.
How is the tax realized in assets? Are they sold?
If necessary for the inheritor to meet their tax obligations, sure. I'm sure there's a dozen different estate tax systems in place that tax professionals would know more about, but yes, liquidating assets would be one way for an interior to meet their tax obligations.
What would another way be? Say I inherited my parents company they built, entirely privately owned.
You would be charged a tax proportional to the value of that business. How you pay it is up to you. This is how estate tax is currently done in the US at the Federal level. Again, I'm not a tax professional, so if you want to know more I'd suggest looking into it yourself.
That would essentially mean family businesses, at least past a certain size, would be impossible. Or more realistically, they would just obfuscate the ownership structure.
Which is why estate taxes have caps such that people who own small family businesses are rarely affected.
Not all family businesses are small
I'm aware.