Where you die matters. While you’ll pay the same federal estate tax no matter where you die, 1/3 of the states have a separate estate or inheritance tax. The most populous state, California, is the latest state to consider adding a state estate tax. Read on to learn more. When and Where You Die Matters … [Read more...]
Grantor Trusts Provide Flexibility and Ease
A trust may be taxed as either a grantor trust or a nongrantor trust. Each type of trust has advantages and disadvantages. This article examines a grantor trust and situations in which it might be useful. Grantor Trusts Provide Flexibility and Ease … [Read more...]
Higher Volume of Large Gifts Given in 2012
There is a unified estate/gift tax on the federal level in the United States, and you must be aware of the current exclusion so that you can determine whether or not you are subject to the tax. Those who are exposed have something to be very concerned about however because the maximum rate of the tax is 40% this year. Throughout 2012 this exclusion, that encompasses taxable gifts that you give during your life as well as your estate, was $5.12 million. However, if you were in possession of … [Read more...]
Intelligent Funding of 529 Plan Can Provide Tax Savings
If you have assets that are in excess of the federal estate tax exclusion amount you have to take steps to gain tax efficiency. Giving gifts that are tax-free would be one possibility, but this is not as easy as it may sound. Any time you transfer property to someone else it is considered to be a taxable gift. The reason why you don't have to pay taxes most of the time is because there are exemptions. One of these is the lifetime combined gift/estate tax exclusion. It has a base of $5 million … [Read more...]
Powerball and the Gift Tax
A lot of Americans enjoy playing the Powerball lottery. You are given the opportunity to become an instant multimillionaire, and sometimes the jackpot accumulates to stunning proportions. A record-setting jackpot was recently available, and the winning ticket was sold in the Sunshine State of Florida. What would you do if you won a Powerball jackpot and took a lump sum payout of say $400 million? Unfortunately, you would immediately have to part with a significant percentage to pay income … [Read more...]
Tax-Free Gifts: Higher Limit in 2013
You can give gifts equaling a certain amount of money each year without eroding your available unified lifetime gift/estate tax exclusion. By doing this you can pass along assets to family members who would be inheriting them someday anyway in a tax-free manner as you steadily reduce the taxable value of your estate. In 2012 the limit for annual tax-free gifts was $13,000. You could give gifts to any number of people equaling up to $13,000 tax-free. This year we are fortunate enough to have an … [Read more...]
Should Asset Transfers Be Taxed?
It is interesting to examine the logic that is utilized by those who question the fairness of the estate tax. Apparently their arguments made a lot of sense to many people here in Ohio because the estate tax on the state level has been repealed starting in 2013. There is however a federal estate tax that is still in place, and there are many who would like to see this levy repealed as well. The central argument that is presented by people who assail the federal estate tax is the contention … [Read more...]
Generous Tax-Free Gift Giving Window Closing
One of the things to take into consideration when you are serious about keeping your estate plan up to date is the fact that federal estate and gift tax laws are always changing. Your estate may be free of taxation one day and heavily exposed the next, and this is not an exaggeration. At the end of this year there are some significant changes pending that are very relevant to anyone planning ahead for the future. The tax relief act that was passed in 2010 expires when 2012 comes to a close. … [Read more...]
Consider Utilizing Annual Gift Tax Exemption
If your estate is in taxable territory you would do well to take action to preserve your wealth. The first step is to determine if in fact your resources exceed the federal estate tax exclusion amount. As of this writing the exclusion is $5.12 million and the maximum rate of the tax is 35%. However, as laws stand on this day the exemption is going down to just $1 million while the rate rises to 55% when 2013 arrives. There are over 8 million households in the United States with resources … [Read more...]
