Overview of the new law. The 2012 Taxpayer Relief Act made permanent many estate, gift and GST tax provisions, including the ability to transfer any unused estate exemption amount between spouses (referred to as “portability”), that were due to expire on Dec. 31, 2012. The Act also increased the maximum estate, gift and GST tax… Read More »
Below are some of the more common questions and answers about Gift Tax issues. You may also find additional information in Publication 559 or some of the other forms and publications offered on our Forms Page. Included in this area are the instructions to Forms 706 and 709. Within these instructions, you will find the tax rate schedules… Read More »
U.S. Estate Tax Estate Tax – The estate tax is a tax on your right to transfer property at your death. It consists of an accounting of everything you own or have certain interests in at the date of death. Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return Form 706, United States… Read More »
The revision of the Form 706 contains several important changes to the form that are the direct result of the new law. These changes can be summarized as three items: one, changes made to page one to allow for a computation of the applicable credit; two, a new page has been added for the portability… Read More »
Deceased spousal unused exclusion amount, or “DSUEA” Now, applicable exclusion amount is defined as the basic exclusion, which is the $5 million or the $5,120,000.00, plus the deceased spousal unused exclusion amount, or “DSUEA.” This, in effect, increases the applicable exclusion amount of an electing surviving spouse by any unused exclusion of an electing predeceased… Read More »
Now, in addition to both the gift tax and the estate tax, there is what we call the “generation-skipping transfer” tax, or GST tax. The GST tax is an additional tax that is applied in a case of any transfer either during the lifetime of the transferor, or at the death of the transferor to… Read More »
Simply stated, the gross estate includes all property subject to the Federal estate tax. Thus, the gross estate depends on the provisions of the Internal Revenue Code as supplemented by IRS pronouncements and the judicial interpretations of Federal courts. In contrast to the gross estate, the probate estate is controlled by state (rather than Federal)… Read More »
What is Income in respect of a decedent IRD and how to calculate? For the most part, property you inherit is not included in your income for tax purposes. Items which are IRD, however, do have to be included in your net income, although you may also be entitled to an IRD deduction on account of them.… Read More »
A special kind of irrevocable trust can be used to transfer your residence to your children at a significantly reduced gift tax cost and with no estate tax, yet allow you to continue to live in the residence for as long as you wish. What is a qualified personal residence trust (QPRT)? This special type of trust… Read More »
Individuals might begin thinking about their estate plan, regardless of how soon it is likely to be used. Advance planning will help minimize the amount of tax paid and ensure that all distributions of property and money occur according to the decedent’s personal wishes. Why do you need an estate plan? If the individual has… Read More »