On Thu, 24 Feb 2005 08:43:12 CST, "BMS" <mcfarland[at]yahoo.com> wrote:

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Here's an update from CCH on possible estate tax legislation:

http://tax.cchgroup.com/news/headlin...nws22105.htm#2


-HW "Skip" Weldon
Columbia, SC

I was talking with a ranking Democratic member of the House Ways & Means
Committee and asked where the number will come down for 2011 for estate size
and was told to look for it to settle at about 1.4 million.

That comes from what would exclude all but the top 2% from the tax.

"Will Trice" <wwtrice[at]paragondynamics.com> wrote in message
news:421D29F5.9070807[at]paragondynamics.com...
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Andy wrote:

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But keep in mind that the current estate tax rates anmd limits sunset at
the end of this decade, although undoubtedly W will push to make it
"permanent". Of course, this will by no means actually make any tax law
permanent...

DMP wrote:
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I am going to assume you and your parents are all US citizens residing
in the USA.

First off, your parents should hire an estate planning attorney and pay
to have things done right. If you try to set up trusts without an
attorney you risk creating a mess which will be more expensive to clean
up than it would have cost to do it right in the first place.

According to the IRS, beginning in 2004 no estate tax is owed on
estates of 1.5 million or less and you don't even need to file an
estate tax return. See
http://www.irs.gov/businesses/small/...=98968,00.html So,
right there it seems you can quit worrying about estate taxes.

Property doesn't need to go through probate if you have a valid
pay-on-death designation on the account. For example, a CD or bank
account could be titled "Mr. X and Mrs. Y as joint tenants with right
of survivorship, Payable on Death to Mr. Z" (Check with your bank to
see what they will do in this regard). Mutual fund companies might
also allow designation of a pay on death beneficiary. Depending on
your jurisdiction, you may be able to do transfer on death designations
for cars/boats, personal property and/or real estate.

Even though you probably don't have estate tax issues, and it may be
possible to set up transfer on death designations, your parents should
still hire an estate planning attorney to advise them to make sure that
things are done right.

Andy

DMP Wrote:
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Hi there

Your parents have a very extensive estate and therefore a number of
planning methods might need to be employed.

Speaking from an Inheritance Tax perspective there are a number of ways
they can reduce the value of their estate during their lifetime, as
there are various exemptions that can be employed. Just two examples
are the Nil Rate band allowance (currently £263,000) and the annual
exemption of £3,000 each.

There are other exemptions but instead of going into too much detail
here the best thing is to direct you to
http://www.draft-your-will.com/inheritance_tax.html. This provides an
overview of the exemptions.

Usually, the major asset of an estate is the family home and the nil
rate band can be used to plan with regards to this. An important
question however is what is the legal title with which your parents
hold the property? - do they own the property as joint tenants or
tenants in common? This is important because it will affect how the
property is devolved (to whom it can be passed to).

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home and is a vehicle for setting up any necessary trusts.

If you want to guage some idea of the potential Inheritance Tax that
would be payable on the estate there is an online calculator you can
use at http://www.draft-your-will.com/IHTCalc.html. Once you have some
idea of how much tax could potentially be paid you and your parents
will probably find it easier to plan.

This is a very extensive subject hence I have only provided brief
advice and I hope you find the above link useful. However, if you would
like to discuss the matter further please feel free to contact me
directly enquiries[at]Draft-Your-Will.com

Kind regards


--
JsByrne

DMP wrote:
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Key point in estate planning: under current tax law, inherited assets
receive a "step-up" in basis to the value on the date of death (or
occasionally an alternate valuation date, 6 months later).

And an heir bases any capital gains or losses on that value. So
typically there is little or no taxable income when selling inherited
assets. Inherit GE stock that was bought for $1/share, when its value is
$35/share...your cost basis as the heir is $35/share and you only pay
tax on gains above that amount. Step-up in basis is one of the principal
long-term tax benefits given to the wealthy - it's a free pass on
capital gains taxes, regardless of asset size. Hence the estate tax.

Caveats:
1. the step-up might go away as a compromise, if estate taxes are
repealed - there's a bill in the House right now for example.
2. there can be situations where income tax is owed, and there's no
basis step-up...common example is assets held in an IRA.
3. for a $1.5M estate hire an estate planning attorney!

-Tad

My parents want to work with me(only child) about how to pass on their
estate to me with as little probate and taxes as possible. My parents
have an estate worth about 1.5 million and we're looking into setting
up a A-B trust and/or living trust to avoid as much probate as
possible. With my parents' mortgage paid off (and cars, jewelry too),
what would be my taxable income off the sale of my parents ownings
after they pass on?