When you are receiving an inheritance, you may wonder if you are required to pay a tax on the inheritance. The answer is probably not.The recipient of an inheritance is not going to be paying transfer taxes on the inheritance unless there is an inheritance tax in the state within which the recipient resides. Only six states have an inheritance tax (though Kentucky is one of them). There is no federal inheritance tax.An inheritance tax is not the same thing as an estate tax. An … [Read more...]
Mortgages Payments and Retirement
One of the reasons that so many people want to have their mortgage paid by the time that they retire is that trying to make mortgage payments when you are living on a retirement income can be very difficult. Though paying off your mortgage before you retire may be exactly the right thing for you to do, it may be better to invest that money in other ways.Before you decide if you should pay off your mortgage, there are a few things that you may want to consider, such as the return on your … [Read more...]
What Is Estate Tax Exclusion Portability?
People who have been very successful financially must consider the impact of the federal estate tax. This tax carries a 40 percent maximum rate that can significantly erode the legacy that you are passing on to your loved ones.There is an estate tax credit or exclusion that separates those who must pay the tax from those who are exempt. In 2014, the exact amount of the federal estate tax exclusion is $5.34 million.Under current laws there can be annual adjustments to account for inflation. … [Read more...]
Gift Tax in Ashland: Do I Pay a Tax on Gifts to My Children?
In Ashland, Kentucky, gifts that you give to others, including your children, are potentially taxable on the federal level. Because of the unlimited marital deduction, you can give unlimited gifts to your spouse free of the gift tax, but gifts to everyone else are subject to the tax.The reason why you generally do not have to write a check is because of the fact that there are gift tax exclusions. First, let's look at the annual per person gift tax exclusion. $14,000 Per Year, Per … [Read more...]
Will My Heirs Face Inheritance Taxes?
There are different types of taxes that can enter the picture when you are transferring assets. Many people have heard of the estate tax, and they assume that an inheritance tax and an estate tax are the same thing.In fact, these are two different types of transfer taxes.Estate TaxAn estate tax is levied on the entirety of an estate before it is distributed among the heirs. There is a federal estate tax that is applicable in all 50 states.The maximum rate of the federal estate tax is 40 … [Read more...]
What Is the Annual Gift Tax Exclusion in Florence Kentucky?
There are taxes on gifts in the United States. Technically, you should be keeping track of your gift giving so that you can report taxable gifts to the Internal Revenue Service. The reason why most people don't bother doing this is because of the gift tax exclusions that exists.In this post we will look at the annual gift tax exclusion in Florence Kentucky and briefly touch upon the unified estate and gift tax exclusion for clarification purposes. Unified Gift & Estate Tax The federal gift … [Read more...]
How Can I Leave My Estate to My Spouse Tax Free?
You may wonder if you can leave your estate to your spouse tax-free, Before we answer this question, let's take a general look at taxes as they apply to bequests.Income TaxIt seems as though you are asked to pay income taxes any time you receive an influx of money. This can lead to the believe that your spouse may be required to report an inheritance as income.This is not the case. An inheritance would not be looked upon as taxable income by the Internal Revenue Service. However, it should … [Read more...]
Farmers Get Break Via New Tax Act
Some people who are potentially exposed to the estate tax would not consider themselves to be "wealthy." They earn a decent living as farmers, but they are certainly not living the lifestyles of the rich and famous.Many farmers own large pieces of land that have been in the family for generations. Over time it has appreciated considerably, and its value may exceed the estate tax exclusion amount.This concern weighed heavily on the minds of many farmers as 2013 approached. Without new tax … [Read more...]
Work of Art Donated to Museum to Settle Estate Tax Case
There was an interesting settlement to an estate tax dispute that was reached recently involving a work of art that cannot be sold.The work in question, a sculptural combine called "Canyon," features a bald eagle that had been stuffed by a taxidermist. It is theoretically very valuable because it is the work of Robert Rauschenberg.However, eagles are a protected species. To prevent people from thinning out the species even further by killing eagles for sale protections were put into place … [Read more...]
Something Couples Should Know About Portability
Because laws are always changing, you should develop an ongoing relationship with your estate planning attorney and be proactive about having your plan reviewed on an annual basis. Without periodic reviews, sometimes these changes in the law can render your existing estate plan obsolete.We had some notable changes at the beginning of 2013 after the passage of the American Taxpayer Relief Act of 2012. One of them was an increase in the maximum rate of the federal estate tax from the 35% rate in … [Read more...]
