Estate Planning

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Facts - Books - News    U.S. Facts Of Law:


Estate Tax

Estate tax is also known as the "death tax".  It is a regressive tax on the estate of a deceased person above a certain exempted amount.  Currently the exemption for the federal estate tax is two million dollars but in 2010 it will be suspended all together for one year.  It is scheduled to resurface in 2011 with an exemption of one million dollars.  Many States also impose an estate tax.

Financial assets payable or transferable upon death along with life insurance benefits, if the deceased owned the life insurance policy or if it was payable to the estate, are included in the total assets of the estate for tax purposes.  However, charitable contributions by the estate can be used to reduce the taxable amount of the estate.

The estate tax rate adjusts slightly year to year but hovers right around 50% on the taxable amount of an estate.  It is believed by sane people that this tax should be abolished.  It destroys small family businesses when the primary owner of the business dies.  For instance, a family owned business started and owned by ones father worth $5 million and earning a reasonable $400,000 yearly would create an estate tax burden of at least $1.5 million.  If the father owned other assets such as a $500,000 home, another $250,000 in estate taxes would be owed.  Few families in business for themselves are able to make a $1.5 million to $2 million dollar sudden payment without selling their father's business and, thus, putting themselves out of business.

Unfortunately, many in Congress cannot control their penchant for large spending bills and prefer to tax the heck out of Americans rather than reign in their spending appetite.

 

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ESTATE TAX BLOG Bloomberg BNA
ESTATE TAX BLOG Bloomberg BNA Estate tax repeal hasn39t been part of the conversation surrounding tax reform lately. I think it39s safe to assume that the average Republican hasn39t become more supportive of the tax as a concept, but events seem to be changing the calculus and, in

Watch Out For State Estate Taxes AgWeb Blog
Watch Out For State Estate Taxes AgWeb blog Most farm families will not end up owing federal estate tax with proper planning and structure, it would typically take a combined gross estate of more than 20 million to be subject to federal estate tax. However, if you happen to live in a state

State Inheritance And Estate Taxes: Rates, Economic Implications, And The Ret...
State Inheritance and Estate Taxes: Rates, Economic Implications, and the Return of Interstate Competition Bloomberg BNA Death and taxes. Tax planning can help reduce state inheritance and estate taxes, but can be complicated and time consuming. In this article, the Tax Foundation39s Jared Waczak discusses the economic effects these taxes have, and how they reduce

Debunking Six Gifttax Myths Cleveland Jewish News
Cleveland Jewish News Debunking six gift tax myths Cleveland Jewish News Moreover, if a donor dips into the lifetime exemption, it39s a wash because it reduces the estate exemption dollar for dollar. Ways a donor can come out ahead include leveraging the exemption, paying gift tax the same 40 percent rate as the estate tax

Letter: Estate Tax: Fear Tactics Used On South Dakotans Sioux Falls Argus Le...
Letter: Estate tax: Fear tactics used on South Dakotans Sioux Falls Argus Leader Recent letters from writers Marilyn Teske and Mark Meierhenry make a compelling argument that the federal estate tax should not be repealed. This is in stark contrast to Sen. John Thune39s stated position that he supports its elimination. For those of

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Facts of Law explaining what is the estate tax

Facts of Law - What Is Estate Tax