When most people think of estate planning, they picture the transfer of wealth and assets. Parents often leave money and property to their children and grandchildren, for instance. In such cases, being the executor of a loved one's estate may be a welcome and manageable responsibility.
The tax troubles of celebrities are often fodder for gossip columns. Are these stories relevant to most Americans? Often, the answer is no. But in a few cases, there are lessons to be learned from how certain celebrities settled debts with the Internal Revenue Service.
A Congressional bill recently introduced would modify the manner in which we pay the federal estate tax. This would give taxpayers inheriting money the choice between paying the estate tax or, in the alternate, paying a small percentage of their gross income for a period of seven years or more.
A capital gain is simply the profit you receive as a result of selling a capital asset. When there is sale of the asset after owning it for a short period of time, such sale results in short-term capital gain treatment. If sale of the asset takes place after holding onto it for a longer period, the sale of the asset receives the more favorable long-term capital gain treatment. Likewise, a loss from the sale of a capital asset can sometimes reduce tax liabilities.
Many people get nervous when they hear the term “IRS audit," but very few Americans are actually audited. In fact, less than 1 percent of people who file individual tax returns are audited, and the IRS chooses people carefully, focusing on higher earners.
If you own a business then you have two types of estate planning to think about: personal and business. Ultimately, business estate planning answers the question, “What will happen to your business when you are gone, and how will that take place?”
Welcome back. We are currently discussing methods of reducing or avoiding the federal estate tax, which applies to property that is passed to heirs upon death. The most important thing to point out is that estate taxes do not apply to everyone. In fact, 99.8 percent of estates are subject to the tax because of the high exemption that exists, according to the Center on Budget and Policy Priorities.
Federal estate tax applies when property such as cash, stocks, real estate and other property is transferred from a deceased person to his or heirs. However, estate tax does not apply to everyone. In fact, only about two out of every 1,000 estates in the U.S. are subject to the tax because of the high exemption amount that exists, according to the Center on Budget and Policy Priorities.
Estate planning decisions are usually pretty straightforward for married people. Most often, your spouse is your main beneficiary and the person you choose to handle medical decisions in the case of incapacity. But what if you are single?