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20 Cards in this Set
- Front
- Back
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Purpose of federal transfer tax system
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To tax the transfer of wealth at least once at each generation |
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Maximum tax rate
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40% |
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Commonalities between gift and estate tax
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Charitable deduction Unified credit |
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Calculation of estate tax |
compute tax on entire amount, and then deduct the estate tax applicable credit amount ($2,117,800) |
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Gift splitting
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Allows a gift of property owners by one spouse to be treated as if one-half of it was made by each spouse, there doubling the allowable annual exclusions--federal gift tax
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Annual exclusion
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Can gift up to $14k/yr w/ no taxes-- federal gift tax |
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Tax inclusive/exclusie |
Estate tax-- $ used to pay estate tax is part of the gross estate |
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Income taxes basis
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Estate tax- stepped up |
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Valuation of life insurancee
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Whole life- cash value plus unearned premium Paid up - premium it would take to be. A single pay |
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Blockage discount
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A sizeable amounof stock contained in the decedents estate cannot be readily sold at one time without decreasing the stocks market price. |
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Annuity discount (charitable and commercial) |
Value is equal to the premium charged by the issuing insurance company for a single life annuity o the survivors life as of the decedent date of death |
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Annuity discount (private and charitable trusts) |
Value is determined by the PV of future payments. |
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Tenancy in common |
The FMV of their share |
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JTWROS |
Spouses - 1/2 of the FMV Not spouses - FMV based on the deceased personal contribution to the original purchase price. Must be able to prove contribution. If not able to prove then 100% of FMV is included. If property was received as a gift then everyone has equal ownership |
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TBE and CP
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50% |
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Special use valuation
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1)land owned by decedent or decedent family 2)value of qualified real and personal property must equal at least 50% 3)value of the qualified real estate must equal at least 25% 4)must be located in the US |
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Date of valuation |
Date of the decedent death or 6 months after (alternative date). Applies to everything in the estate. |
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Due date for return for federal estate tax |
9 MO. Can file for a 6mo extension |
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Federal estate tax rates
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18 - 40% |
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Steps in determining the value of an estate
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1)what type of asset is it? 2)which valuation date? 3)which valuation method - FMV or exception? |
