By topic: Estates

Handling Key Non-Tax Financial Issues When a Loved One Passes Away, Part 3

In this part 3 of this three-part series, learn how to handle key non-tax issues when a loved one passes away. There is much to know and to consider, from a simple matter such as how many “original” death certificates you should obtain to how you deal with the revocable trust that’s now irrevocable because of the death.

Tax Considerations When a Loved One Passes Away (Part 2)

If you become an executor of your loved one’s estate, you may have some important tax decisions to make, as we describe in this article. For example, on the decedent’s final Form 1040, should you elect to deduct medical expenses that are unpaid at the date of death? Should you file Form 706 when not required by law to do so?

Tax Considerations When a Loved One Passes Away (Part 1)

If a loved one passes away and you serve as the executor or inherit assets, you need to consider your duties and/or tax planning. This is Part 1 in a three-part series where we consider your duties should you be the executor, along with planning to avoid the exorbitant tax rates that could apply to a living trust, special filing rules for the widow or widower, required minimum distributions, and more.

New Law Kneecaps Stretch IRA—Here’s What You Can Do About It

The Setting Every Community Up for Retirement Enhancement Act (SECURE Act) passed last December makes a big change in the stretch IRA—an estate planning device favored by well-off IRA holders. To cope with the downside of this new law, you need to do some planning, as we explain.

Thinking of Moving to a Lower-Tax State? Tax Angles to Consider

If you are thinking of moving to a state that levies no personal income taxes, you need to consider all the other taxes, including property, sales, estate, and inheritance. And then, if you decide to make the move, you need to establish your domicile in the new state to decouple yourself from the old state.

Potential Estate and Gift Tax Threat: Should You Worry?

COVID-19 has changed our nation’s economics. One big hit has been to the federal deficit. What does this mean to the future of taxes? Will the estate and gift taxes increase? If so, what can you do today? You will find a strong idea in this article.

Avoid the Gift Tax—Use the Tuition and Medical Strategy

Lawmakers have given you an easy strategy to avoid paying gift and estate taxes. The strategy involves tuition and medical expenses that, likely, are common issues for your loved ones. Sadly, this tax avoidance technique is often unknown or overlooked—but not for those who have this article.

Check Your Beneficiary Designations Now, Before Disaster Strikes

Surprise! You have an agreement in place that says your retirement account goes to person 1. But you have a beneficiary designation that says the account goes to person 2. Read this article to see which wins and why the winner is likely a big surprise.

Impact of Death, Retirement, and Disability on the 179 Deduction

Have you purchased vehicles for use in your business? Did you claim Section 179 deductions on them? What happens to your Section 179 deductions if you retire or become disabled before the end of the vehicle’s useful life? What if you die? This article tells you what you need to know.

IRS Issues Final Section 199A Regulations and Defines QBI

Your ownership of a pass-through trade or business can generate a tax deduction of up to 20 percent of your qualified business income (QBI). The C corporation does not generate this deduction, but the proprietorship, partnership, S corporation, and certain trusts, estates, and rental properties do. In this article, you learn how to find your QBI.

How to Help Your Adult Child Buy a Home—the Tax-Friendly Way

Your adult child asks a big favor—help in buying his or her first home. If you are lucky enough to be able to help, you want to understand and avoid the tax pitfalls. In this article, you find five possible solutions to help your child while avoiding the tax pitfalls.

Captive Insurance: Huge Tax Shelter

Do you have significant insurance needs? If so, the captive insurance company might save you money on your insurance, create a nice tax shelter, and produce a pile of cash. To achieve this agreeable result, you have to follow the rules and consider the tax code safe harbors.

Mom Dies: Daughter Inherits and Fixes Five Inferior Annuities

Say you inherit an annuity. That’s nice. But when you examine the annuity you find that it’s a bad investment; what can you do about it? Answer: plenty! This article shows you how a Section 1035 tax-free exchange can work to your benefit. Note the words “tax free.” That’s lovely, a tax-free fix for a bad annuity.

Being Married!

Do you gain or lose tax advantages when you marry? Lawmakers have tried to deal with the marriage issue for years, and they have made multiple changes in the laws. But there’s no perfect law, so winning and losing because of marriage still exists.

Cut the Spouse’s Tax Cost of Inherited IRAs

Inheriting an IRA used to mean a heavy estate tax and federal income tax burden. But recent changes to the estate tax have significantly reduced this burden. Further, spouses have special income-tax planning techniques available that can make inheriting an IRA today a much happier experience.

Tax Tips for Tax-Free Life Insurance

Is your receipt of a life insurance death benefit tax free to you? For income tax purposes, the likely answer is yes. But when you get into the estate, the answers are (1) maybe, (2) no, or (3) yes, depending on who the recipient is and what type of planning has taken place. Life insurance planning is important now because the current $5.12 million exemption from estate taxes expires on December 31, 2012, and lawmakers slotted the 2013 exemption at $1 million and increased the tax rate from 35 to 55 percent.

Use the Estate Tax Value to Avoid Federal Income Tax on Home

Keeping your home until death has advantages. At death, your estate avoids both capital gains and recapture taxes, and passes the home to your heirs at a stepped-up fair market value basis. This combination triggers a good number of income tax planning strategies.

Tax Tips for the New Estate and Gift Tax Rules

The newly enacted tax cut creates a new 2011 and 2012 estate tax. The new rules are taxpayer friendly in two respects. First, they are easy to understand. Second, they contain a $5 million exclusion (portable, if properly elected, for husband and wife, giving a married couple an exclusion of $10 million).

Tax Choices for Estates of Those Who Died in 2010

Tax law gives choices to the executors who are handling the estates of those who died in 2010. Choice one is to apply the 2010 rules. Choice two is to apply the newly enacted 2011 and 2012 estate tax rules.

Cashing Out Real Estate Profits without Section 1031

Section 1031 exchanges are perfect when you are going to stay in the real estate rental or investment business. When it’s time to cash out, you need to look at different strategies that help you avoid taxes and give you cash to spend (liquidy).

Inheritance Advice for the Family Home

Distributing the assets of an estate needs a tax plan to ensure the favorable results embedded in the tax law.

Hiring Children

Hiring your children can be a really good move. If you have a sole proprietorship or a husband and wife partnership, you can save a lot of money in taxes. Be careful, though, with corporations, LLCs, estates, and partnerships.

Death Taxes the IRA

At death, IRAs are not treated like homes, which pass to the heirs at fair market value with no income tax issues. Instead, the IRA faces both the estate tax and the income tax. In this court case, the combined estate and income taxes devoured $1.6 million and the heirs had $1.1 million left to spend.

Estate Planning for 2006 and Beyond

Current law deletes the federal estate tax in 2010 and then reinstates it at higher rates in 2011. The year 2010, when there is no estate tax, contains its own unique planning requirements. If you are concerned about taking care of your loved ones and protecting what you have worked so hard to build, free your mind of a major worry by getting your federal estate plan in order.

Who Owns This Property?

When you receive property in which you had an interest as a result of a family member’s death, make sure you clarify your income-tax basis in this property right away.