Inheritance tax

[Win]

Originally Posted By: Drew99GT
Read up on the gift tax - I think it's like $11,000 can be gifted to an individual tax free? But remember, it has to be a pretty big estate to get past the unified transfer credit.


Or $22K for a couple, beyond that it comes off the unified credit.

If it drops back to the $1M unified tax credit, it really won't take much of an estate, particularly if it contains real estate, to blow right past that.

In all the talk about extending / not extending the Bush era tax cuts, I've heard not one word about the death tax.

 

[dwendt44]

IIRC, the gift tax only applies to gifts over $13,000 as of this year.

 

[Turk]

Money inherited, unless in a tax-deferred IRA, has already been taxed!!!

So, how can it be taxed again??

 

[Drew99GT]

Originally Posted By: tpitcher
Money inherited, unless in a tax-deferred IRA, has already been taxed!!!

So, how can it be taxed again??



In essence, it's been taxed up to 4 times! Say someone owns a corporation and has to pay themselves a wage to meet IRS guidelines (ie trying to make all their income at 5%/15% dividend rates to avoid higher income tax rates).

The corporation pays tax itself on the income, that income flows through to an owner either through 1040 wages or a capital gain/dividend and is taxed, that money then is taxed via the estate tax when he/she dies, and some of it could then be taxed by anyone who inherits it!

 

[GeaugaFletcher]

This is rubbish. No way we should pay tax of any kind on inheritance, IMO.

Isn't there a generally-practiced way to avoid the government's thieving hand through a trust and so forth?

 

[Mr Nice]

Instead of an inheritance...... is it OK for your parents to liquidate their assets and 'give' you a check every week until their account(s) balance is ZERO ?

Would Uncle Sam be unhappy that they collected zero taxes. I ask this cause they put every thing in my name, the the whole enchilada.

 

[Cutehumor]

Originally Posted By: LT4 Vette
Instead of an inheritance...... is it OK for your parents to liquidate their assets and 'give' you a check every week until their account(s) balance is ZERO ?

Would Uncle Sam be unhappy that they collected zero taxes. I ask this cause they put every thing in my name, the the whole enchilada.


I'm interested in this as well. in laws are in their 60's and worth over a million dollars. so I don't want uncle sam to take half when they pass.

 

[Drew99GT]

Originally Posted By: GeaugaFletcher
This is rubbish. No way we should pay tax of any kind on inheritance, IMO.

Isn't there a generally-practiced way to avoid the government's thieving hand through a trust and so forth?


Using various trusts and carefully gifting money can help avoid the estate tax.

 

[Drew99GT]

Originally Posted By: Cutehumor
Originally Posted By: LT4 Vette
Instead of an inheritance...... is it OK for your parents to liquidate their assets and 'give' you a check every week until their account(s) balance is ZERO ?

Would Uncle Sam be unhappy that they collected zero taxes. I ask this cause they put every thing in my name, the the whole enchilada.


I'm interested in this as well. in laws are in their 60's and worth over a million dollars. so I don't want uncle sam to take half when they pass.


Ahhhhhhhhhhh! I see now why you put up with your wife.

Just kidding!

 

[dwendt44]

Corporations don't pay taxes on wages or dividends it gives to owners or employees. Those are tax deductible expenses that are written off at the end of the year.
They will be taxed as wages or income to those making them.

When they die, some of the estate is taxes as cap. gains and if over the deductible, inheritance taxes apply.
As the recipient of an inheritance, it MAY be taxed, it may not be taxes.

 

[Tempest]

Originally Posted By: JHZR2
Very confusing... Two conflicting answers even in this thread. Some of the linked documentation seems to imply that nj tax is only assessed if the deceased was an nj resident.


Vagary is typical of laws and why we have plenty of lawyers to go around.

 

[Mr Nice]

Whats the max (cash) you can withdraw from an account and not raise any questions ?

Nothing wrong with giving cash to your child.

 

[Cutehumor]

I always thought it was $4999. any cash withdrawal from a bank or investiment fund more than $5000 is automatically reported to the IRS. anyone can verify?

 

[Cutehumor]

Originally Posted By: Drew99GT
Originally Posted By: Cutehumor


Ahhhhhhhhhhh! I see now why you put up with your wife.

Just kidding!


I'm just her gigolo.

 

[Win]

Originally Posted By: LT4 Vette
Instead of an inheritance...... is it OK for your parents to liquidate their assets and 'give' you a check every week until their account(s) balance is ZERO ?

Would Uncle Sam be unhappy that they collected zero taxes. I ask this cause they put every thing in my name, the the whole enchilada.



See above discussion regarding taxability of gifts.

Uncle Sam doesn't have much of a sense of humor about taxes. A lot of people doing time can attest to that.

 

[Mr Nice]

Quote:
I'm interested in this as well. in laws are in their 60's and worth over a million dollars. so I don't want uncle sam to take half when they pass


We are in the same boat, except my parents are in their late 70's and put every thing in my name for many reasons.
I feel I shouldn't have to pay taxes when they have been paying taxes on it for many years. Plus the government is just going to waste any inheritance taxes they collect.

 

[ARCOgraphite]

How bout if you set up a bank account in Your and a Parent's name and move tier financial assets into it (prior do death).

 

[Drew99GT]

That would still be a gift!

 

[Mr Nice]

Forget about any checks or joint bank accounts.....etc.

Whats wrong with your parents giving you cash while they are alive and not an inheritance upon death ?

IE: if they withdraw ___ amount of cash weekly and give it to you and you sit on it verses putting in your bank account.

 

[Drew99GT]

I guess at that points, it's on the honor system. Yes, they could theoretically withdraw a small amount of cash from a bank account each week and give you the cash, but past 13,000 bucks, it's technically subject to federal gift taxation.

I'm not making ANY suggestions.

I don't know how banks track this kind of thing but it might trigger "something". They have a very intricate system for trying to detect unlawful transfers of money.