Tax Guru – Ker$tetter Letter

Helping real people win the tax game.

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Archive for the ‘Estates’ Category

Posted by taxguru on April 2, 2009

Spend It in Vegas or Die Paying Taxes – The long awaited year of zero Estate (aka Death) Tax may not come true if a certain Marxist president has his way.  As this article points out, that means much more money for those of us in the business of helping people legally avoid that kind of confiscation.

 

Posted in Estates | Comments Off on

Outdated tax advisor?

Posted by taxguru on December 9, 2008

Q:

Subject:  Lifetime exclusion for gift taxes?

Dear Tax Guru,
 
On your website you say that the lifetime exclusion for gift taxes is 1 million dollars. My tax accountant in California says that the IRS publications say that it is 1 million dollars for estate taxes but $385,000 for gift taxes.
Can you enlighten me on this matter.
Thank you,

A:

Your accountant is obviously using reference materials that are seriously out of date.  That is very scary in the ever changing world of taxes to think that a tax guide from at least five years ago is still relevant today.

You can see the exemption amounts on my website.   

You can also download the IRS’s forms and instructions from the IRS website.  

Good luck.

Kerry Kerstetter

Follow-Up:

Dear Mr Kerstetter,
Thank you very much for responding to my e-mail.
Sincerely,

 

 

 

Posted in Estates, Gifting | Comments Off on Outdated tax advisor?

Estate Planning Info

Posted by taxguru on May 28, 2008

Some useful and informative short articles from the latest Nolo Press email newsletter:

How Living Trusts Avoid Probate

Using Life Insurance to Provide for Your Kids

What You Can’t, or Shouldn’t, Do in Your Will

Making a No-Frills Will 

Tax-Saving AB Trusts

Using Joint Ownership to Avoid Probate

 

 

Posted in Estates | Comments Off on Estate Planning Info

Estate Tax Hypocrisy

Posted by taxguru on April 22, 2008

The Kennedy Klan has been promoted to a status of as close to royalty as can be attained in this country, in spite of the fact that their fortune was amassed by Joe Kennedy through illegal bootlegging and stock fraud activities. To top it off, they have long used trusts to avoid having to pay the kinds of estate taxes that they want everyone else to pay.

This is an interesting video of Teddy explaining how they pay their fair share.

Posted in Dims, Estates | Comments Off on Estate Tax Hypocrisy

Estate Asset Transfers

Posted by taxguru on September 11, 2007

Q:

Subject: Estate Taxes

My wife died with a will that basically leaves everything to me.  Two houses were right of survivor,  One CD she owned alone that was pod.  Both of her iras were also pod.  The only thing she had in her name alone that wasn’t pod or ros was stock valued at about $13K.  The total value of the above was about 700K.  My attorney says that I can pass any amount of the above to our two children without any tax consequences.  It seems strange that the amount is an option.  I want to pass along to them as much as I can afford without putting myself in a cash bind, however it seems odd that I can pick an amount in lieu of dividing everything in half and giving them her half.

 

I ask my accountant and to be honest I was as confused as I was after discussing it with my lawyer.

 

Thank you,

 

 A:

There is obviously a bit of miscommunication here, both with your attorney and your accountant.  The transfer of ownership of the assets left behind by your wife is neither as simple as you are inferring from your attorney’s comments, nor should it be as complicated as your accountant is making it out to be.

Each type of asset needs to be evaluated separately in regard to its taxability for the recipient, as well as its new stepped up basis for the recipient’s records.  You didn’t say if you are in a community property state or not; but that fact is very important.  If so, the entire cost basis of most of the assets is stepped up to its fair market value as of the date of your wife’s death; while in non community property states, only the half owned by her is stepped up and your original half remains the same.

As your advisors should be explaining to you, most of the assets will pass with no tax consequence, with the main exception of the IRA accounts.  Depending on what types of IRAs those are (conventional, non-deductible, Roth), they will most likely be taxable to the recipient, unless they are properly rolled over.

Your best bet would be to sit down with your legal and/or tax advisors and go over each item in your wife’s estate individually and discuss these points.  If neither of your advisors feels comfortable discussing these items in easy to understand terms rather than blanket generalizations, you will need to find a new advisor to work with; at least just for this matter.

I wish I could be more help, but that’s all I can do for you at this time.  Good luck.  

Kerry Kerstetter

 

 

 

Posted in Estates | Comments Off on Estate Asset Transfers

Posted by taxguru on June 15, 2007

Posted in comix, Estates | Comments Off on