Overall, the tax laws that apply to inheritance distributions are favorable to American families. You are not required to report an inheritance as taxable income, and this would include life insurance proceeds. Plus, if you inherit assets that appreciated during the life of the decedent, you do not have to pay capital gains taxes on the appreciation. On the other side of the coin, if you have been very successful from a financial standpoint, you have to be concerned about a significant level … [Read more...] about Estate Tax Exclusion Adjusted for Inflation
In this post, we are going to examine the unlimited estate tax marital deduction. However, before we get into this specific area, we should provide a broad overview of the federal estate tax itself. The federal estate tax is imposed on wealth that is being transferred that exceeds a particular amount. This threshold is called the estate tax exclusion. The amount of the exclusion has varied significantly over the years, so the current numbers we are going to share are subject to change. In … [Read more...] about Is a Bequest to Your Spouse Taxable?
A trust may be taxed as either a grantor trust or a nongrantor trust. Each type of trust has advantages and disadvantages. This article examines a grantor trust and situations in which it might be useful. Grantor Trusts Provide Flexibility and Ease … [Read more...] about Grantor Trusts Provide Flexibility and Ease
We have a federal estate tax in the United States, but most people do not have to contend with it, because there is a relatively high credit or exclusion. This is the amount can be transferred before the estate tax would be applied. Before the beginning of this year, it was somewhere in the vicinity of $5 million. This was the figure that was installed in 2011, and there were ongoing adjustments to account for inflation. When the new tax laws went into effect in 2018, the estate tax exclusion … [Read more...] about Can You Give Gifts to Avoid the Estate Tax?