Tax

Have a Tax Question? Ask a Tax Expert

Ask an Expert,
Get an Answer ASAP!

Tax

A client is a 100% owner of a C corp. He wants to make arrangements

Customer Question
A client is a 100%...
A client is a 100% owner of a C corp. He wants to make arrangements for it to go to his 8 children upon his death. What steps does he need to take. Is this something as simple as having it indicated in his will the a certain amount of stock go to each child? Are there any tax consequences?
Submitted: 5 years ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 5 minutes by:
6/1/2012
Tax Professional: CGCPA, CPA replied 5 years ago
CGCPA
CGCPA, CPA
Category: Tax
Satisfied Customers: 3,820
Experience: over 40 years experience in tax matters
Verified

Welcome to Just Answer. I am here to help you resolve your tax and finance concerns. Please feel free to ask anytime you need extra help.

Depending on the net worth of the client, the distribution to his children at his death may be subject to the estate tax. A net worth of over $5,000,000 is subject to the tax at this time. However, the rules do change so you will need to keep an eye on that.

Here is a short piece from the IRS about the estate tax. The rates can, at higher estate values, be monstrous. You should consider preparing a draft return now so you can review it with your client while he is still able to properly consider his options. Once that is done let me know a bit more and I will help you establish a game plan to minimize the tax bite. The article from IRS has links to other documents you should consider.


<table border="0" cellspacing="0" cellpadding="0">



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 (Refer to Form 706 (PDF)).
The fair market value of these items is used, not necessarily what you paid for
them or what their values were when you acquired them. The total of all of these
items is your "Gross Estate." The includible property may consist of cash and
securities, real estate, insurance, trusts, annuities, business interests and
other assets.

Once you have accounted for the Gross Estate, certain deductions (and in
special circumstances, reductions to value) are allowed in arriving at your
"Taxable Estate." These deductions may include mortgages and other debts, estate
administration expenses, property that passes to surviving spouses and qualified
charities. The value of some operating business interests or farms may be
reduced for estates that qualify.


After the net amount is computed, the value of lifetime taxable gifts
(beginning with gifts made in 1977) is added to this number and the tax is
computed. The tax is then reduced by the available unified credit.


Most relatively simple estates (cash, publicly traded securities, small
amounts of other easily valued assets, and no special deductions or elections,
or jointly held property) do not require the filing of an estate tax return. A
filing is required for estates with combined gross assets and prior taxable
gifts exceeding $1,500,000 in 2004 - 2005; $2,000,000 in 2006 - 2008; $3,500,000
for decedents dying in 2009; and $5,000,000 or more for decedent's dying in 2010
or later (note: there are special rules for decedents dying in 2010.)


For additional information, refer to Instructions for Form
706
.


References/Related Topics
Ask Your Own Tax Question
Customer reply replied 5 years ago
The business owns a restaurant that is leased out and operated by someone else. The annual income is about 36,000. The fixed assets are 180,000 (with depreciation of 120,000) and I would guess the property is worth about 400,000 if it were to be sold.

This is will below the criteria for estate tax.

There are 50,000 shares of stock with a par value of $1.00. Would the shares go to the children at the same basis?
Tax Professional: CGCPA, CPA replied 5 years ago
The tax will, assuming all remains constant, be zero and a filing will not be required. The shares will transfer to the children at the book value at the date of your client's death. However, please remember that the estate tax includes all the taxpayers assets net of obligations rather than just the restaurant. It sounds like there will be no problem.
CGCPA
CGCPA, CPA
Category: Tax
Satisfied Customers: 3,820
Experience: over 40 years experience in tax matters
Verified
CGCPA and 87 other Tax Specialists are ready to help you
Ask your own question now
Ask CGCPA Your Own Question
CGCPA
CGCPA
CGCPA, CPA
Category: Tax
Satisfied Customers: 3,820
3,820 Satisfied Customers
Experience: over 40 years experience in tax matters

CGCPA is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,300 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,310 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

Robin D.

Robin D.

Senior Tax Advisor 4

13,695 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,651 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

R. Klein, EA

R. Klein, EA

Enrolled Agent

1,839 satisfied customers

Over 20 Years experience

< Previous | Next >

Related Tax Questions
Can I report rental income in my tax return on a property
Can I report rental income in my tax return on a property thar is owned by my father? He does not live in the US is not a US citizen and can sign a document to allow me to receive the rental… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
My question is about depreciation for rental property. My
Hello. My question is about depreciation for rental property. My rental property had no income during one year. In this case, since there was no income, I do not need to claim depreciation for that sa… read more
Fred Rook
Fred Rook
Corporate Controller
BSBA
31 satisfied customers
Joint WROS Fidelity: How to file taxes with this account?
A friend and I have a Joint WROS Fidelity account. My wife and I file Federal and State income tax jointly. Our friend does not file income taxes because the only source of income is Social Security. … read more
Bill
Bill
Master's Degree
2,278 satisfied customers
What is the max. gift tax as proposed in 2017 and 2018 by
What is the max. gift tax as proposed in 2017 and 2018 by President Trump? … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Information on Gift tax return. My 100 year old mother wants
my 100 year old mother wants to gift the balance of a home loan to my brother, Balance is aprrox $35,000. What are the mechanics? … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,463 satisfied customers
What are tax rules for an inherited Roth IRA, GA, the
what are tax rules for an inherited Roth IRA JA: Since estate law varies from place to place, can you tell me what state this is in? Customer: GA JA: What documents or supporting evidence do you have?… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I filed for an extension to file my 2017 income tax return.
I filed for an extension to file my 2017 income tax return. I recently suffered a stroke - 6 weeks ago - and have been unable to finalize my return. I should be able to file it within the next 30 days… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,463 satisfied customers
I have a income and my real estate taxes on my home doesn't
I have a income and my real estate taxes on my home doesn't not seem to affect the amount I owe in taxes on the 1040 , what is the reason for this?… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,463 satisfied customers
We lost child tax credit this year by making $152000...that
We lost child tax credit this year by making $152000...that $2k cost us over $7k in taxes. Is there anything to do about that? … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,463 satisfied customers
I have a NJ estate tax return to prepare for a decedent in
I have a NJ estate tax return to prepare for a decedent in NJ. The brokerage statement has an account with the decedent and a trustee set up for her grandson under a U/W/O . Are these assets included … read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
723 satisfied customers
Can a C-Corp file a "final" return with the IRS if there are
Can a C-Corp file a "final" return with the IRS if there are no longer any business operations, but the company bank accounts remain open?… read more
taxmanrog
taxmanrog
Master\u0027s Degree
698 satisfied customers
Can franking credit on an Australian income tax return be
Can franking credit on an Australian income tax return be used on Form 1116 as tax paid on the franked distributions? … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
Rules on Rollovers (Return of a non-taxed IRA Distribution).
Rules on Rollovers (Return of a non-taxed IRA Distribution). Over 70-1/2 years old) … read more
PDtax
PDtax
Owner
Master\u0027s Degree
1 satisfied customers
I need the depreciation rate for my 2014 tax return, I now
I need the depreciation rate for my 2014 tax return My name is*****: What kind of computer do you have? Customer: I now have a lenovo and daughter filed for me so not to sava on here … read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,217 satisfied customers
Did NOT file an estate tax return on estate valued at
Did NOT file an estate tax return on estate valued at $400,00 and cash distributed to 15 heirs. Am I required to give them a form i.e 1099 for their distributed amount. … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
This tax question regards depreciation, cost basis and asset
Hello, this tax question regards ***** ***** basis and asset reporting when you tear down one vacation rental property and replace it with another on the same lot. The original vacation cottage still … read more
ABC Accounting Group
ABC Accounting Group
Bachelor\u0027s Degree
682 satisfied customers
I've prepared gift tax returns for my mom's trust for three
I've prepared gift tax returns for my mom's trust for three years. I've shown 100% of all funds put into the trust in the year funded. All gifts have been in cash and are immediately available for dis… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
How do I have to amend a Gift Tax return? The original
How long do I have to amend a Gift Tax return? The original return did not indicate that the gift should be part of the lifetime gift tax exclusion. I want to correct that mistake. The gifts totaled a… read more
keeperumiami
keeperumiami
Sr Financial & Tax Consultant
Bachelor\u0027s Degree
1 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x