We are going to address a question that is on the minds of some people that have a good grasp on federal transfer taxes. Before we drill down to it, we will provide some background information for those that do not fully understand taxes on inheritances. The Good News There is some surprisingly good news on this subject, which is rare when you are talking about the tax man. If you are named as an inheritor in a will, you would not be required to report the income when you file your federal … [Read more...] about Is the Federal Gift Tax Exclusion Higher in 2021?
Puerto Ricans hold a unique position under U.S. law. U.S. estate taxation treats those from Puerto Rico different from other U.S. citizens or citizens from other countries. Read on to learn more. … [Read more...] about Puerto Ricans are Unique, as Is Estate Planning for Them
People are often confused about the way that inheritances can be taxed. If you have heard the terms “estate tax” and “inheritance tax,” you may assume these are two different ways of describing the same thing. There are also those that think that the terms refer to the requirement to report inheritances as income when you file your regular tax returns. In reality, all of the above assumptions are mistaken, and we will provide clarity in this post. Income Taxes and Capital Gains … [Read more...] about Inheritance Tax vs. Estate Tax: Is There a Difference?
Before we address the question that serves as the title this blog post, we must provide the necessary background information. We have a federal estate tax in the United States, and it carries a potentially devastating 40 percent maximum rate. The good news is that most people do not have to pay this death levy, because there is a credit or exclusion that is quite high. This is the amount that can be transferred before the estate tax would become applicable. In 2020, the exclusion is $11.58 … [Read more...] about Can You Give Gifts to Avoid Estate Taxes?
One of the things that would naturally enter your mind when you are planning your estate is the question of taxation. Will your heirs be required to pay taxes on inheritances that you leave to them? For the most part, the answers are encouraging, but there is one looming threat to your legacy. The Good News Inheritances are not considered to be taxable income by the IRS, so an heir does not have to claim an inheritance on regular income tax returns. Another positive applies to the capital … [Read more...] about Will My Heirs Pay Taxes on Their Inheritances?
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...] about When and Where You Die Matters
A new estate tax proposal would lower the amount passing free from tax to $3.5 million and increase the rates of taxation. It would also eliminate some tried and true strategies for reducing estate taxation. Read on to learn more about this proposal and its prospects. New Estate Tax Proposal … [Read more...] about New Estate Tax Proposal
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...] about Grantor Trusts Provide Flexibility and Ease
The recent tax law temporarily doubled the estate tax exemption. That doesn’t mean there’s no need for estate planning. Estate plans consider many important aspects, not just estate taxes. This article examines some of the many considerations besides estate taxes. Estate Planning: It’s Not Just About the Estate Taxes … [Read more...] about Estate Planning: It’s Not Just About the Estate Taxes
Estate planning for the international client can be tricky. This article looks at the estate tax treatment of U.S. citizens and non-resident aliens. The article then looks at an example of someone who lived in the U.S. and then departed. Planning for the International Client … [Read more...] about Planning for the International Client