Have Tax Questions? Ask a Tax Expert for Answers ASAP
Hi and welcome to Just Answer!Section 7520 of the Internal Revenue Code requires the use actuarial tables for valuing life estates and remainders.Publication 1457 provides examples.In your case - the interest rate in June 2013 is 1.2% - see here - http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Section-7520-Interest-Rates and Table S (1.2) shows that the factor for a life estate for a 79-year-old person is 0.09888 and a remainderinterest is 0.90112 - http://www.irs.gov/file_source/pub/irs-tege/sec_1_table_s_2009.xlsSo - assuming the value of the residence is $100,000 - for gift tax purposes - the value of the gift is $100,000 x 0.90112 = $90,112.
And correspondingly - the value of the life estate would be $100,000 x 0.09888 = $9,888
I meant to mark the highest(best) service. I will re-enter.
Please let me know if you need any clarification this matter.Are you able to see the answer?
New Question-In June,2013 issue of Kiplinger Personal Finance it is stated on page 58,that Bronze and Silver plans qualify for Health Savings Plan accounts. Does this mean that the HSA deduction is "above the Line"? ALSO, does a TP have to have earned income to qualify for the "above the line" deduction ?
Did you receive my new question? See below.