About Schmidt Read Online Free

for life, it would escape taxation when Mary died, and, when Schmidt died, the tax would fall on his estate.
    Except that I don’t fancy playing the dowager on my daughter’s property, and he wouldn’t have minded pointing out to Murphy that if he had kept his mouth shut, Mary might have left the house to her husband after all, was the rejoinder Schmidt would have liked to make, but what was the use? Apparently, he was to continue to be a slave to a house that would never be his own.
    Thus, when Mary turned her eyes on him—there were tears in their corners, and he couldn’t help thinking of her contact lenses and how lucky it was that she still cared about her looks—and smiled, saying, Mr. Murphy is right, don’t you think so? he smiled back and said, Yes, that’s just fine.
    That was that, but he saw the way to undo it. For Charlotte’s wedding present, he would surrender his life estate and pay the gift tax on the entire value of the house. He was sure that was how the tax law still worked. The market was down, but not for properties of this quality. It would have to be a big payment. He would call Murphy and go over the figures, but, whatever they were, his heart told him he could and would do it. There was another aspect of the situationto be considered. If he moved fast enough, and bought another place for himself, there was tax he could save some money on, the tax on the gain on the sale of the Fifth Avenue apartment. He had bought it the year of his and Mary’s marriage, with the money he had inherited from his mother. It was large and elegant, so that, even after he became a partner, there was no need for them to move. But the price that had made him gasp at the time turned out, in hindsight, to have been nothing at all, less than one-fiftieth of the sum for which he had been able to sell the place. He had literally rubbed his hands together with glee watching the value of that place go up, realizing that it was his real nest egg. Yes, in terms of what his investment adviser liked to call preserving family wealth, the result wouldn’t be all that bad—he would use up the gift tax exclusion and pay about seven hundred thousand in gift tax, save some of the million dollars in tax on the gain on the apartment, and hand the property over to Charlotte at a time when gift and estate taxes were high but not so high as one might fear they would become in the future.
    Where the proposed transaction departed from a pleasant capitalistic model was in its effect on his income: he had planned to pay the gains tax and add what was left from the sale of the apartment to his capital. And he hadn’t intended to buy for himself a house that cost as much as the astonishing price the apartment had commanded, which was what he would have to do if all of the capital gains tax was to be saved. In fact, he had had no thought of buying any house; his plan, to the extent such a thing existed, had been to live right where he was, in a place he had become used to thinking of as his home, to which he was attached, and which also happenedto offer him, not to put too fine a point on it, the birthright—or is it the dream?—of every American retiree: a house that’s all paid for. He went back to his calculations. In order to carry out his new plan in full, he would have to take almost three million dollars of his cash and invest it in Charlotte’s taxes and the purchase of a new house he didn’t want and, in theory, didn’t need. That money, placed in municipal bonds, could be expected to produce an income of one hundred fifty thousand per year, tax free. Now it would no longer be forthcoming. He would still have the payments from his firm—one hundred eighty thousand dollars per year—and the income from the balance of his savings, perhaps another one hundred fifty thousand tax free if he invested that money in municipals as well. It occurred to Schmidt that, to the average American, this would seem a pretty good deal for a