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Estate Tax Law Questions
When a person dies they may leave an estate behind, an estate that may be made up of assets such as cash that are in bank accounts, real property, mutual funds, and many other things. If a person is to inherit the assets often they will need to look into what the estate may cost them in
. The estate may not have a net value high enough to trigger and estate tax, but to be safe an individual will want to look into what the estate
are for their state and sometimes the state of the deceased. Below are questions that have been asked of the Experts, in regards to estate
What is estate tax?
Estate tax, which may also be known as an
, is a tax that is to be paid out by the individual who has inherited real property or money of another individual who has passed away. Internationally the terms estate tax and inheritance tax may not be interchangeable as an estate tax is the tax that has been gauged on the deceased’s assets and an inheritance tax has its basis on the legacies that the beneficiaries of the estate have received. In the United Kingdom an estate tax may also be known, though not legally, as a death duty.
How does estate tax work if the individual is a permanent resident of the United States but is a citizen of another county?
have the estate tax impressed upon the transfer of said estate of all decedents that are United States citizens or are residents of the United States. If an individual meet the requirements of the domicile residence analysis test, they will the same as a United States citizen and will be subjected to the estate tax laws on all of their assets world-wide. If two citizens of the United States are married and one of the individuals becomes deceased the transfer of assets to the survivor are not subjected to the estate tax, due to the Martial
of Sec. 2056. However if the married couple consists of a United States citizen and a resident non-citizen, and the transfer or assets is in excess of $100,000; it is not going to be eligible for the
and the difference between the amount being transferred and $100,000 will be subjected to the estate tax, unless a qualified domestic trust have been put in place.
Can an individual pre-pay their estate taxes in the State of Arizona?
At this time it is not possible for an individual to pre-pay their estate taxes. There has been much discussion of this becoming possible somewhere in the future, but at this time it has not made in to the tax laws regarding estate taxes. However if an individual’s estate is valued at less than five million dollars then the estate will not be subjected to estate tax.
If an IRA is transferred through an estate to the beneficiaries is it subject to estate taxes?
When an IRA is transferred through an estate, it is not subject to estate taxes. If the transfer is to the surviving spouse, the IRA becomes the spouse and allows the spouse to keep contributing into the account. If the beneficiary is anyone else then the IRA would also become theirs with the difference being that they are not allowed to make contributions into it. However, the IRA may be continued. In either case of beneficiaries the IRA is able to be cashed out with the funds being penalized. However once the IRA is cashed out then the funds will be taxed.
If an IRA is passed on to a beneficiary, it may be continued, but only if it is passed to a spouse is it able to be contributed to. Any beneficiary may cash the IRA in without being penalized, but the funds will be taxable. If an individual has any questions regarding estate tax law they should seek the assistance of the Experts.
Recent Estate Tax Questions
My mother inheritance my sister property in New Mexico 140K
My mother inheritance my sister property in New Mexico 140K value. Her concern is how much of this value She has to pay taxes in divide the balance between 4 children.
I am yr old and was given a gift of $50,000 2yr ago. It
I am 69 yr old and was given a gift of $50,000 2yr ago. It was in stocks, I just recently took it out to buy some land and that did not happen yet. Now someone tells me I should have paid taxes on it, because I am only allowed $13,000 ayear. Please help me. My dad is trying to give $13,000 now because his stocks were losing money and he pulled it out. I told him to hold onto to that till I find out what I have to do with the other gift he gave me.
This is a question about real estate tax law; Scenario 1:
This is a question about real estate tax law;
Scenario 1: A owns property he bought at $300,000 in year 1, with $20,000 down and a $280,000.00 mortgage. Bad times hit and in year 5 A pays off the $280,000 loan for only $200,000. Thereby creating (according to cockeyed Federal income tax rules) a phantom "taxable earned income" for year 5 of $80,000.00.
To avoid this nonsensical scenario, in year 5 A sell the property for the $200,000 owed to an arm's length third party.
Question: Can he write off the loss against the earned income in year 5 or would the loss be deemed a "capital loss"?
Scenario 2. Same as Scenario # ***** except that A buys back the property in year 2 at the same $280,000 he sold it for.
Question: Will the 2 transactions be "deemed" a sham to avoid taxes on the phantom profit?
Scenario 3: Instead of only one year or less separating the sale and repurchase by A of the property, the space between the two transactions is extended to 2 or 3 years or more.
Question: Does that change the tax consequences?
Scenario 4:Does anything change if the sale in any of the above scenarios is made to an independent but related party
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