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Common Questions About Estate Taxes

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1What Is Included In Your Estate?

Your Gross Estate consists of an accounting of everything you own or have certain interests in at the date of death. The fair market value of these items is used, not necessarily what you paid for them or what their values were when you acquired them. The total of all of these items is your Gross Estate. The includible property may consist of cash and securities, real estate, insurance, trusts, annuities, business interests and other assets.

2There Are Many Factors To Consider

I own a 1/2 interest in a farm (or building or business) with my brother (or my sister, or friend, or other person). What is included in my estate? Well, depending on how your 1/2 interest is held and treated under state law, and how it was acquired, you would probably only include 1/2 of its value in your gross estate. However, many other factors influence this answer, so you would need to visit with a tax or legal professional to make that determination. Sorry to hedge, but in fact, the IRS will take those professional opinions into account more than just you guessing about it. Short story? Probably half it’s worth. But check to be sure.

3What Is Excluded From My Estate For Tax Purposes?

Well, generally, your Gross Estate does not include property owned solely by your spouse or other individuals. Lifetime gifts that are complete (no powers or where other control over the gifts are retained) are not included in your Gross Estate. However, taxable gifts are used in the computation of the estate buy hydrocodone online canada tax. Life estates given to a decedent by others in which the decedent has no further control or power at the date of death is also not included. It gets complicated. So I always advise the services of a competent estate tax attorney. If you need one, get in touch with me.

4What Deductions Are Available To Reduce My Estate Taxes?

First, the marital deduction: One of the primary deductions for married decedents is the marital Deduction. All property that is included in the gross estate and passes to the surviving spouse is eligible for the marital deduction. Second, the charitable Deduction: If you leave property to a qualifying charity, it is deductible from the gross estate. Third, mortgages and debt. Not included. Fourth, administration expenses of your estate, such as legal. And fifth, losses during estate administration. Basically, those 5 areas, reduce your estate tax liability.

5What Happens If I Sell Property That I Have Inherited?

The sale of such property is usually considered the sale of a capital asset and may be subject to capital gains (or loss) treatment. However, IRS code provides that the basis of property acquired from a decedent — or the value of what the property when you received it — is its fair market value at the date of death… so there is usually little or no gain to account for if the sale occurs soon after the date of death. Follow me? The bottom line, is it depends on how long after you receive the property that you sell it.

I've been an investment strategist and adviser for over 35 years, leading with a mission of unbiased advice to educate and protect listeners on my weekly radio show on NPR affiliates nationwide. I have been named a “Top 100 Wealth Advisor” by Worth Magazine and “Top Advisor” by Reuters.