Estate Tax-Federal Estate Tax

John M asked:


I will receive an inheritance from my parents and want to establish irrevocable trusts for my children with that money.

I would like to assign my interest in some of the estate assets to an irrevocable trust to avoid gift tax in creating these trust after I receive the money. ( I would direct some of the money to go directly into the trust rather than taking possession of it)

The question is may I do this without incurring gift/income tax? The theory is that if I simply assign an interest to the trust and the executor of the estate then writes the check to the trust that I will never have received the money and cannot be taxed via gift tax like I presumably would if I received the inheritance and then transferred the money to trust.

I am aware of the various estate and gift tax credits and am not concerned with these, so we may presume they are inapplicable. All I want to know is if directing the post estate tax assets to go to trust will avoid a gift/transfer tax since these are post tax monies? I presume If I took the money and then transfered to trust the transfer would be taxable against me.

I’m also not interested in advice to seek an attorney’s opinion. I’m aware this is a good idea, but I’m asking ya’ll, and I can’t afford an attorney at the moment.

Edwin Sword

lady_bella asked:


and there is no estate tax, or inheritance tax in the state of NM or AZ, unless the estate is worth over 600 thousand dollars, then do I have to claim that next year as an Income Received on my tax return?

If anyone knows, or if there is a professional out there who can help me I would greatly appreciate it. Thanks so much!
kckid2: Thanks for your answer. The dividends are from my grandparents house that got sold after they passed away. And that was divided among 4 of us.

Sherril Pellegren

CHAD I asked:


I am self employed and will not show much earned income. Is it always advisable to pay real estate taxes in the tax tear, even if you have maxed out allowable deductions?

Lucio Chafin

basketballfan asked:


could the tax code be more complex? My girlfriends dad died in europe in 2002. he had set up stock funds in a major bank, 5 seperate jt ten accounts with each of 5 kids. The bank executive is executor of estate and recommends leaving the money in funds there (of course) question is entrire estate is worth about 2.5 million us dollars at time of death.. does the jt tenant make it an inheritance or not? How does she bring money here legally? saw 4 different lawyers got 4 different answers, she wants to pay appropriate taxes but has NO idea how to go about it, Any definitve websites on this subject?
each sibling had a seperate acct being jt with the deceased dad so there are no issues on who gets what, just tax libaility in The US,,dad was a foreign citizen

Olive Reusswig

Banker asked:


I’m told that’s why there are antique wardrobes; real estate taxes were higher if you had closets in your house so the houses were built without closets and the people used furniture to store clothes instead of closets, the food pantry didn’t have a door so it couldn’t be called a closet.
Politicians pass some unusual things into law but have you ever heard of this?

Bruce

Christian asked:


do you think the real estate tax credit will get extended

Chad Luinstra

h asked:


im filing chap 7 for a home which should end up foreclosing and… i got the county real estate bill due in jan. 7th. my bankruptcy lawyer told me on a phone that the bank or whoever buying through foreclosure will end up paying the tax, so don’t worry about it. is this true…?
someone told me that i should have lawyer ‘amend’ the bk ppwk stating the buyer has to pay tax owed in a property.
i left a vm earlier for lawyer to call back in that regard but not sure if he will do that for me…
what should i do…
hey, if homes foreclosed and chap 7 (hopefully not convert to chapt 13 as decision pending), will i owe irs 1099c?

Scott Emperor

Flattruth asked:


I need clarification regarding capital gains tax for a real estate transaction. I read generally 6% of selling price of the property or fair market value of the property received in an exchange transaction. Does this mean 6% of the difference between sell price and previous buy price (the profit) or 6% of gross sale price (which is a lot!)?

That is, does capital gains have a different meaning than the normal?
The definition of Capital gains I know:
Final price minus buying price = Capital gains

Is capital gains definition different for this transaction?

Nick Lee

n e asked:


My friend inherited a house from her father’s estate. She is also going to be getting income from the estate on a quarterly basis… perhap $30,000 to $60,000 per year for about 10 years. Does my friend have to pay any tax on these proceeds (estate tax or income tax)?
The entire estate is probably no more than $2 to $4 million, and the rest the estate goes to the wife of the decedent. So, 2/3 of the estate went to the wife, and 1/3 goes to the daughter (my friend). The house is worth approx $200,000.

Efren Rodeman

dreamy asked:


I have no income for the last 10 years. But I got 100k in inheritence and bought a house with it in CA. Will i have to pay estate tax? Income tax? How much?

Evan Navarre