The accumulation of wealth can give you a lot of freedom, and it is a satisfying feeling to accomplish your goals. Of course, taxation can be a source of concern if you are a high net worth individual. There are heavy taxes to pay during your lifetime, and it does not stop there. 2022 Connecticut Estate Tax Exclusion There are a total of 12 states in the union that have state-level estate taxes. Half of them are in the Northeast, and we do have a state estate tax here in Connecticut. The … [Read more...] about What Is the 2022 Connecticut Estate Tax Exclusion?
Has Your Property Appreciated? Estate Taxes May Be a Factor
Housing prices have been the talk of the investment community over recent years. Buyers are having a hard time closing deals because of a supply and demand dilemma. In some areas, people are actually offering significantly more than sellers are asking, so this is bull market. We have an office in Westport. In Fairfield County, median home values have increased by 43.5 percent over the last couple of years according to NBC News Connecticut. Statewide, the figure is 32 percent. This is a … [Read more...] about Has Your Property Appreciated? Estate Taxes May Be a Factor
Connecticut Estate Tax Exclusion Has Been Increased for 2021
For the most part, the news is good when it comes to taxes on inheritances. You do not have to claim a direct inheritance on your regular income tax returns, and this includes insurance policy proceeds. Inherited appreciated assets get a stepped-up basis. The person inheriting the asset is not responsible for gains that accumulated during the life of the decedent. They would be on the hook for future appreciation if and when they realize a gain. On the bad news front, there are estate … [Read more...] about Connecticut Estate Tax Exclusion Has Been Increased for 2021
2021 Estate Tax Exclusions Have Been Set
The federal estate tax targets people that have been particularly successful from a financial standpoint. There is a relatively high exclusion, and you don’t have to pay the tax if the value of your estate does not reach this threshold. To understand the place we are at right now, you have to absorb a bit of a back story. Path to the Current Exclusion In 2009, the federal estate tax exclusion was $3.5 million, and the maximum rate was 45 percent. There was a complete repeal in 2010 that was … [Read more...] about 2021 Estate Tax Exclusions Have Been Set
Inheritance Tax vs. Estate Tax: Is There a Difference?
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?
Can You Give Gifts to Avoid Estate Taxes?
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?
Will My Heirs Pay Taxes on Their Inheritances?
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?
When and Where You Die Matters
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
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...] about Grantor Trusts Provide Flexibility and Ease
Planning for Lottery Winners, Part 1 of 2
A lucky winner recently won $320 million in the lottery. This article looks at an example of a prior winner’s mistakes. The next article in the series will examine strategies for lottery winners. Planning for Lottery Winners, Part 1 of 2 … [Read more...] about Planning for Lottery Winners, Part 1 of 2