sstterry":ho40tf91 said:
True Grit Farms":ho40tf91 said:
hurleyjd":ho40tf91 said:
My Son is 56 and my daughter is 50. Both successful and on their own and have been since they were in their twenties. I have helped them along the way and they appreciate it. I pretty well raised them free range to make their own decisions never pushed them to do what made me happy. Always told them to be independent and make their own way. Both are smart enough to know that there is no way to make a living with cattle. Any way both are trying to influence me in my decision. Land prices and all the inputs to raise cattle is to large for the amount of return. The land I own is land that some I paid $88.75 per acre. I did buy 88 acres several years ago For $1500 per acre and has not had a return yet. But it could possibly bring $3000 to $4500 per acre. Really no profit until sold. My mother in law had a great way to pass her inheritance along. She turned everything into cash and made CD,s to each daughter with a POD easiest way to close her account in no time flat.
After posting that, you NEED to talk to a good CPA, and or tax lawyer.
I agree with True Grit. You can talk all you want about how low Estate taxes are. But, if you liquidate before you die, the Capital Gains tax will kill you. If you leave land through a will, the
person inheriting it gets to wipe the slate clean and their basis becomes the fair market price at the time of your death.
Or persons, I have my doubts about this whole Hurleyjd thread. Anyone with anything knows rule number one.
All financial decisions need to be tax driven, if you don't live by that you can't get ahead.
BY JULIE GARBER Updated February 14, 2018
The federal estate tax was repealed as of January 1, 2010, but then it was resurrected retroactively back to January 1 on December 17. This tax is collected on the transfer of a person's assets to his or her heirs and beneficiaries after his death. The total tax due is calculated by adding up the fair market values of all the decedent's assets as of his date of death, although the executor of his estate retains the right to have everything valued on an alternate date.
Credits and allowable estate tax deductions are subtracted from the total, then a percentage of tax applies to the balance over a certain threshold called an exemption.
Who Is Subject to the Federal Estate Tax?
The estates of each and every U.S. citizen are subject to the federal estate tax, but very few estates actually have to pay it. The Internal Revenue Code effectively gives each U.S. citizen a "coupon" to apply against his estate tax bill—the exemption. This exemption was worth $3.5 million in 2009, and it was worth $5 million in 2010 and 2011. It increased to $5.12 million in 2012, then to $5.25 million in 2013. By 2014, it was up to $5.34 million, then it increased again to $5.43 million in 2015 and to $5.45 million in 2016 before reaching $5.49 million in 2017.
So how does this exemption work? If the value of the net estate—the gross estate reduced by allowable estate tax credits and deductions—does not exceed $5.49 million or the current amount of the exemption, the estate will pass to its heirs and beneficiaries free from federal estate taxes.
If the net estate exceeds $5.49 million, only the value over this amount is taxed.
A Little History
Under the provisions of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010—"TRUIRJCA" for short—the estate tax exemption was indexed for inflation, which meant that it would increase incrementally each year to keep pace with the economy.
TRUIRJCA set the tax rate at 35 percent. These provisions were only supposed to remain in place until December 31, 2012, at which time the federal estate tax laws were supposed to revert back to those that were in effect in 200 and 2002.
This meant that on January 1, 2013, the federal estate tax exemption was supposed to drop all the way down to $1 million again and the tax rate would jump to 55 percent. But Congress and President Obama acted in the early days of 2013 to pass the American Taxpayer Relief Act—"ATRA" for short—which made permanent the changes to the rules governing estate taxes, gift taxes and generation skipping transfer taxes implemented under TRUIRJCA.
This portability of the estate tax exemption between married couples, which was introduced for the first time under TRUIRJCA, was also made permanent. This portability provision allows the estate of one spouse to shift any unused federal estate tax exemption to the surviving spouse so she might inherit from him without her estate exceeding the exemption in the year of her own death.
What Happens If an Estate Is Taxable?
When a gross estate exceeds the federal estate tax exemption for the year of the decedent's death, the estate must file a federal estate tax return called Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return.
Form 706 must be filed with the IRS within nine months of the decedent's date of death. The estate tax payment is due at the same time Form 706 is due. Although an automatic extension can be applied for using Form 4768, Application for Extension of Time To File a Return and/or Pay U.S. Estate (and Generation-Skipping Transfer) Taxes, the payment itself cannot be delayed without accruing interest.
If the decedent's estate doesn't owe a tax because its value doesn't exceed the exemption amount and the executor wants to give the portability bump to the surviving spouse, a federal estate tax return must be filed even though a tax isn't due. The return will simply indicate that the portability option is being exercised, alerting the IRS to the fact.
