OK, a suitable preface to today's blog post is certainly an up-and-front disclaimer that its subject matter is not exactly egalitarian.
How much can I give and not pay taxes?
Many parents and grandparents want to help their children and grandchildren out financially and not have to put the money into a trust for later use.
The good news is this number just went up. Currently you can give away $14,000 per individual per year and not pay gift tax penalties.
In January, the world was saddened to hear about the death of pop star David Bowie. Although his celebrity peaked in the 1970s and 80s, he continued to make music up until his death at the age of 69, when he died of cancer.
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.
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.
It would be great if an estate plan were something you could just set and forget, but life rarely works that way. Many people take responsible action and develop an estate plan that will provide tax savings and protect their assets for their spouses and children. If they don't update those plans to reflect changes in life and the law, however, those careful plans may turn out to be ineffective.
We are still talking about -- or, as a 12-year-old niece would say, still talking about -- sales tax and its impact on estate planning. We admit that 12-year-olds may not be the only ones that were hoping for more drama here -- trust us, if we could think of a way to incorporate a superhero, we would do it.