Tax

Have a Tax Question? Ask a Tax Expert

Tax

# Lady wishes to deed her residence to her daughter,

Lady wishes to deed her residence to her daughter, retaining a life estate. The lady(donor) is age 79. How do you compute the value of her life estate for gift tax purposes?
Show More
Show Less
6/4/2013
Category: Tax
Satisfied Customers: 30,135
Experience: Taxes, Immigration, Labor Relations
Verified

LEV :

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 remainder
interest is 0.90112 - http://www.irs.gov/file_source/pub/irs-tege/sec_1_table_s_2009.xls
So - 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.

Customer:

Thank you.

LEV :

And correspondingly - the value of the life estate would be \$100,000 x 0.09888 = \$9,888

Customer:

I meant to mark the highest(best) service. I will re-enter.

LEV :

Please let me know if you need any clarification this matter.
Are you able to see the answer?

Category: Tax
Satisfied Customers: 30,135
Experience: Taxes, Immigration, Labor Relations
Verified
Customer reply replied 4 years ago

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 ?

Customer reply replied 4 years ago

Did you receive my new question? See below.

Here is a reference to the article you mentioned
http://www.kiplinger.com/article/retirement/T027-C000-S002-new-health-insurance-options-for-early-retirees.html

Does this mean that the HSA deduction is "above the Line"
?
To be an eligible individual and qualify for an HSA, you must meet the following requirements.
•You must be covered under a high deductible health plan (HDHP).
•You have no other health coverage (except what is permitted).
•You are not enrolled in Medicare.
•You cannot be claimed as a dependent on someone else's 2012 tax return
.
For self-only coverage HDHPs for 2013 - the minimum annual deductible is \$1,250 and maximum annual deductible and other out-of-pocket expenses is \$6,250.
According to the article you referenced - Bronze and Silver plans will satisfy the definition of high deductible health plan (HDHP) and satisfy HSA requirements.
These plans should be available via state exchanges starting October this year.

If you meet these requirements, you are an eligible individual. Any eligible individual can contribute to an HSA. For 2013, if you have self-only HDHP coverage, you can contribute up to \$3,250.
Report all contributions to your HSA on Form 8889 and file it with your Form 1040 .
Follow the instructions for Form 8889. Report your HSA deduction on Form 1040 line 25.

Does a TP have to have earned income to qualify for the "above the line" deduction ?
As you see requirements above - having earned income is not required.
Category: Tax
Satisfied Customers: 30,135
Experience: Taxes, Immigration, Labor Relations
Verified
Category: Tax
Satisfied Customers: 30,135
30,135 Satisfied Customers
Experience: Taxes, Immigration, Labor Relations

Lev is online now

A new question is answered every 9 seconds

• 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.

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.
...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.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Enrolled Agent

1,300 satisfied customers

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

Richard

Tax Attorney

4,310 satisfied customers

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

Robin D.

13,695 satisfied customers

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

Megan C

Certified Public Accountant (CPA)

8,651 satisfied customers

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

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

R. Klein, EA

Enrolled Agent

1,839 satisfied customers

Over 20 Years experience

< Previous | Next >

Related Tax Questions
On october 30th I mailed form dt individual to the IRS in
on october 30th I mailed form dt individual to the IRS in Connecticut Certified mail showed it had been delivered on Nov 2 I have heard nothing … read more
Master's Degree
180 satisfied customers
Form 886-A Deductible Home Mortgage Interest Taxpayer has
Form 886-A Deductible Home Mortgage Interest Taxpayer has \$1,000,000 in Grandfathered debt. Line 9 Form 886-A - is this line amount after deducting the garandfathered debt… read more
Master's Degree
180 satisfied customers
Accidentally sent IRS an unsigned copy of our 2016 form 1040
accidentally sent IRS an unsigned copy of our 2016 form 1040 and later received a form 3531 requesting a valid original signature. Should that returned signature be dated to the original submittal dat… read more
Certified Financial Planner(R), Pro
Master\u0027s Degree
727 satisfied customers
Dose mean can not deduct state income taxes only or dose it
dose mean can not deduct state income taxes only or dose it includes property taxes too … read more
Master's Degree
180 satisfied customers
I need a form to apply to have 10% of my SS check deducted.
I need a form to apply to have 10% of my SS check deducted … read more
Barbara
Enrolled Agent, Paralegal
3,466 satisfied customers
Form 1120, cash basis. If Taxes paid to IRS are deductible,
Form 1120, cash basis. If Taxes paid to IRS are deductible, are refunds for overpayment the equivalent of income?… read more
Certified Financial Planner(R), Pro
Master\u0027s Degree
727 satisfied customers
Is "Medicare Part" premiums deductable if so where do I find
Is "Medicare Part B" premiums deductable if so where do I find the proper question in Turbotax? I used Turbotax… read more
Wallstreet Esq.
Tax Attorney
Doctoral Degree
586 satisfied customers
Two questions on federal tax deductibility: 1. We personally
Two questions on federal tax deductibility: 1. We personally paid legal fees for our manufacturer C Corp. The fees were for assistance in preparing a Research & Development tax credit application. Can… read more
Master's Degree
180 satisfied customers
You may recall that tax deductions are only deductible by
You may recall that tax deductions are only deductible by the legislative grace of Congress. After this lesson, you might have realized that Congress was pretty generous with the types of business exp… read more
Barbara
Enrolled Agent, Paralegal
3,466 satisfied customers
I filed my Form 1040, prepared on TurboTax and filed
I filed my Form 1040, prepared on TurboTax and filed electronically via TurboTax. I got nothing back and was told by the IRS that the refund was sent to a different bank transit number than the one sh… read more
Barbara
Enrolled Agent, Paralegal
3,466 satisfied customers
Can house maintenance and property taxes be deducted on form
Hello. Can house maintenance and property taxes be deducted on form 1041 for a house owned by decedent prior to the Executors selling it? … read more
Master's Degree
180 satisfied customers
Us citizen living and working in colombia SA earned income
us citizen living and working in colombia SA earned income and unearned how do i report the interest and dividends are these tax at he same rate or can you also exclude them like the earned income … read more
Certified Financial Planner(R), Pro
Master\u0027s Degree
727 satisfied customers
How do I request my 2016 Individual Personal Income Tax form
Sir, how do I request my 2016 Individual Personal Income Tax form (form 1040) on line? … read more
Barbara
Enrolled Agent, Paralegal
3,466 satisfied customers
A question about mortgage deduction: if person A helps
A question about mortgage deduction: if person A helps person B take a loan to help this person B buy a primary residence, who gets the right to deduct the mortgage interest for tax filing? Person A m… read more
emc011075
Senior Tax Specialist
Bachelor's Degree
16 satisfied customers
A taxpayer, Form 1040 Schedule C, is on the cash basis. The
A taxpayer, Form 1040 Schedule C, is on the cash basis. The average revenue for the last 5 years is \$5,100,000. There is no inventory. The NAICS is 423600Can he remain on the cash basis?… read more
Master's Degree
180 satisfied customers
I would like clarification on the IRS tax deductions and a
I would like clarification on the IRS tax deductions and a rental property I purchased recently. … read more
Robin D.
13,695 satisfied customers
What are lines 15a & 15b on form 1040 for 2015 tax return? i
What are lines 15a & 15b on form 1040 for 2015 tax return? … read more
Matthew Breecher
President
285 satisfied customers
Form 1040 line #44 what taxes--federal income tax + social
form 1040 line #44 what taxes--federal income tax + social security +medicare tax, all or just federal? … read more
Lev