Executive summary:
When I was a kid, my parents made me a 40% partner on paper in one of their businesses, now they expect me to pay taxes out of pocket on 40% of the earnings, though I won't see a penny in return until they die. Is this reasonable? If not, what should I do about it?
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When I was a child, the top estate tax rate in the US was 50%. Imagining half of what they'd built disappear in taxes if they didn't act, my parents made me and my siblings partners in one of their businesses and, over the space of a few years, transferred ownership to us. I currently "own" 40% of that business, or about $300,000.
Unfortunately, that 40% stake means I have to pay taxes on 40% of the profit out of pocket, from my work as a consultant. My parents take 100% of the profit and view the taxes I incur as the "price" of my inheritance. So far, it's left my husband and me on the hook for about $60,000 in extra taxes over our working lives, and my parents still have long lives ahead of them.
I don't feel that the profit from the business should be mine, as I didn't do anything to earn it, but I feel the taxes are a business expense, and so should be covered by the business. I've told my parents as much, but they're adamant this is simply the way the world works. I don't want to cause a rift in the family, but I find the situation more and more unbearable as the years drag on. I just don't see what I can do about it.
Am I unreasonable? If not, any advice?
What I've tried so far:
* Getting my siblings onside. They don't care because they don't earn much and my parents cover their taxes.
* Speaking with my parents' accountant. He finds the situation unreasonable as well, and has told my parents as much.