The value of cheap gifts
Article Abstract:
The costs of gift taxes are lower than estate taxes. This is because the gift tax applies only to the price of the actual gift while the estate tax applies not only to the bequest, but also to the tax needed for it. Thus, while both are computed at 55%, leaving an heir $5 million would require paying $11.1 million including estate tax while a gift of $7.75 million including the tax would net the same amount. Using such an estate planning technique would result in estate savings.
Publication Name: Small Business Reports
Subject: Business, general
ISSN: 0164-5382
Year: 1992
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Using Q-TIP trusts
Article Abstract:
Trusts are recommended for additional estate inheritance control and as a means to avoid the costs of inheritance taxes. To avail of such benefits, the trust should provide for the surviving spouse, should not be detachable from the estate and its status should be elected by the executor of the decedent's estate. This arrangement provides the surviving spouse with a personal interest in the estate, but prevents the same from taking any undue advantages.
Publication Name: Small Business Reports
Subject: Business, general
ISSN: 0164-5382
Year: 1992
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The fund runneth over
Article Abstract:
Pension and profit-sharing plans with less than five participants and an accumulated balance of at least $100,000 are now subject to tax incentive disqualifications. The IRS justifies the reversal of its policy by saying that its interest rate and retirement age value assumptions were understated. According to the IRS, the net effect of such underestimations are extremely large pension plan-related tax deductions.
Publication Name: Small Business Reports
Subject: Business, general
ISSN: 0164-5382
Year: 1992
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