Question.3265 - Estate Tax Death and taxes are two (2) certainties that we can plan for in life. The IRS is still able to tax us in death using the estate tax rules as legislated by congress. For this paper, you will be required to respond to the following scenario: A wealthy couple has hired you to advise them on protecting their estate from taxes upon death. They own a farm and several businesses that they would like to pass on to their three (3) children. Using the Internet, research the IRS’s current level of interest and audits conducted related to estate taxes and proposed changes to legislation related to estate taxes. Write a six (6) page paper in which you: 1. Based on your research related to the current level of interest of the IRS related to estate taxes, assess how this information may factor into your advice and level of aggressiveness with tax minimization related to estate taxes and planning for your clients. Provide support for your position. 2. Based on your review of the recent or current legislative proposals related to estate taxes, evaluate the proposal you believe to be most viable. Indicate how such a change may be implemented into the tax law. Provide support for your rationale. 3. Research the impact of estate taxes on a taxpayer’s ability to transfer wealth to their children and tax planning tools used to minimize estate taxes. Indicate the effectiveness of these tools. 4. Propose a strategy to your client to mitigate or eliminate estate taxes and transfer as much wealth as possible to their children within the current estate tax laws and given level of IRS interest in this area. 5. Evaluate and discuss which estate tax provisions would most likely be abused by taxpayers and elevate the potential risk of an IRS audit. Provide support for your position. 6. Imagine that you are appointed by Congress to simplify the estate tax code related to estate taxes. Suggest changes that would be fair to both taxpayers and the federal treasury, indicating how such taxes would be implemented.Your assignment must follow these formatting requirements: ? Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions. ? Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.
Answer Below:
Under xxx current xxxxx governing xxxxxx gift xxx GST xxxxx that xxxx into xxxxxx under xxx Tax xxxxxx Unemployment xxxxxxxxx Reauthorization xxx Job xxxxxxxx Act xx are xxxx permanent xxx and xxxxxx with xxx exception x the xxxxxxx tax xxxx for xxxx of xxxxx taxes xx increased xxxx to xxxxx TRUIRJCA xxxxxxx the xxxxxx gift xxx GST xxx exemptions xxx provided xxx inflation xxxxxxxx of xxxxx exemptions xxxxxxxxx in xx exemption xxx each xx these xxxxx after xxxxxxxx is xxx compromise xx the xxxxxxx estate xxx was xx make xxx law xxxxxxxxx permanent xxx with x compromise xxxx of xxxxxxx the xxxxxxxx between xxx rate xx percent xxx the xxxx of xxxxxxx A xxxxxxx rate xxxxxxxx a xxxxxxxxxxxxx gift xxx rate xx about xxxxxxx if xxx donor xxxxxxxx three xxxxx after xxx gift xxxx insurance xx an xxxxx that xxxxxxxxxxxx has xxxx strained xxx limits xx gift xxx exclusions xxx exemptions xx order xx provide xxxxxxxxxx liquidity x gift xxx exemption xxx enable xxx creation xx life xxxxxxxxx trusts xx procure xxx life xxxxxxxxx or xx acquire xxxxxxxx from xxx grantor xx the xxxxxxx s xxxxxx The xxx Act xxxx portability xxxxxxxxx The xxxxxxxxxxx regulations xxx the xxx of xxxxxxxxxxx are xxxxxxxxx in xxxxxx in xxxxxx part xxxxx on xxx review xx the xxxxxx or xxxxxxx legislative xxxxxxxxx related xx estate xxxxx the xxxxxxxx of xxxxxx quot xxxxxxxxxxx quot xx the xxxxxxx Estate xxx Exemption xxxxxx permanent xxxxx to xx most xxxxxx In xxxxxxxx TRUIRJCA xxxxxxxxxx the xxxxxxx of xxxxxxxxxxx of xxx estate xxx exemption xxxxxxx married xxxxxxx and xx ATRA xxx made xxxxxxxxxxx permanent xxxxxxxx married xxxxxxx to xxx any xxxxxx portion xx the xxxxxx tax xxxxxxxxx of xxx first xxxxxx to xxx to xxx surviving xxxxxx s xxxxxx tax xxxxxxxxx which xx commonly xxxxxxxx to xx portability xx theestate xxx exemption xxxx will xxxxx to xx very xxxxx while xxxxx estate xxxxxxxx for xxxxxxx How xxxxxxxxxxx impacts xxxxx can xx understand xxxx an xxxxxxx Assume xx client x are xxxxxxx and xxxx all xx their xxxxxx jointly xxxxxx and xxxxx net xxxxx is xxxxxxx dies xxxxx and xxx federal xxxxxx tax xxxxxxxxx is xx the xxxx of xxx death xxx estate xxx rate xx Result xxxxxxx Portability xxxx husband x estate xxx exemption xxxxxxxxxx wasted xxxx wife xxxxx dies xxx can xxxx pass xx free xxxx federal xxxxxx taxes xxxx wife x estate xxxx owe xxxxx in xxxxxx taxes xxxxx her xxxxx estate x exemption xxxx be xxxxxxx estate xxxxxxx estate x estate xxx rate xxxx be xxxxxx with xxxxxxxxxxx Using xxx concept xx portability xx the xxxxxx tax xxxxxxxxx between xxxxxxx under xxxxx facts xxxxxxx s xxxxxx estate xxx exemption xxxx be xxxxx to xxxx s xxxxxxxxx in xxxx giving xxxx a xxxxxxxxx estate x exemption xxxxxxx estate xx the xxxxxxxxxxx of xxx estate xxx exemption xx the xxxxxx will xxxx the xxxxx of xxxxxx about xx estate xxxxx The xxx exemption xxxxx is xxxx permanent xx million xxxxxxx to xxxxxxxxx with x percent xxx rate xx any xxxxxx over xxxx The xxxxx and xxxxxxxxxx for xxxxx made xxxxxx someone x lifetime xx children xxx grandchildren xxxx also xxxxxx to xxx same xxxxx from xxxxxxxxx of xxxxxxx and x tax xxxxx that xxxx means xxxx Americans xxxx continue xx avoid xxxxxx any xxxxxxx estate xxx For xxxx wealthy xxxxxx they xxx not xxxx much xxxxxxxxxxxxxx I xxxxx we xxx close xx the xxxx of xxxx straightforward xxxxx and xxx much xxxx for xxxxxxxx wealth xxxxxxxxx While xxxxxxx estate xxxxx will xxx hit xxxx of xxx affluent xxxxxxx this xxxxx has xxxxx concerns xxx big xxx is xxxxx estate xxxxx While xxxx state xx Connecticut xxx a xxxxx tax xx gifts xxxxx states xxxx state xxxxxx taxes xxxx much xxxxx exemptions xxxx the xxxxxxx tax xxx example xx New xxxxxx the xxxxxxxxx is xx New xxxx and xxxxxxxxxxxxx it xx million xxx ultra xxxx already xxxx many xxxxxx transfer xxxxx to xxxx with xxxxxxxx this xxxx the xxxxxx of xxx not xx wealthy xxxxxxxxxx with x net xxxxx of xx maybe xx high xx million xxxxx households xxx more xxxxxx to xxxx this xxxxxx to xxxxxxx their xxxxxxxx of xxxxxx This xxxxx of xxxxxx is xxxx more xxxxxx to xxxxxxxxx over xxx or xxx generations xx it xx passed xxxx and xxxxxxx up xxxxx multiple xxxxx and xxxxxxxxxxxxx A xxxxxx estate xxx exemption xxxx certainly xxxx this xxxxxx because xx less xxxxxx tax xxxx Planning xx required xxxx towards xxxxxx sure xxx estate xxx exclusion xxx both xxxxxxx will xx utilized xxxxx planned xxx gifting xx to xxx annual xxxxxxxxx amount xxxx year xxx paying xxx a xxxxxxxxxxx medical xxx education xxxxxxxx The xxxxx wealthy xxx more xxxxxx to xxxx substantially xxxx annuity xxxxxx charitable xxxx and xxxxxxxxx trusts xxxxxxx trusts xxxxxx partnerships xxx valuation xxxxxxxxx to xxxxxx or xxxxxxxxx estate xxxx and xxxxxxxxxx skipping xxxxxxxx GST xxx liability xx a xxxxxxxx to xxxxxxxx or xxxxxxxxx estate xxxxx and xxxxxxxx as xxxx wealth xx possible xx their xxxxxxxx within xxx current xxxxxx tax xxxx and xxxxx level xx IRS xxxxxxxx in xxxx area xxx estate xxx gift xxxxx in xxxxxxxxxx now xxxx Congress xxx permanently xxx the xxxxxx and xxxx tax xxxxxxxxxx at xxxxxxx a xxxxx that xxxx rise xxxx inflation xxx but xxx richest xx the xxxxxxxx probably xx able xx protect xxxxx holdings xxxx taxes xxxxxxxx is xxxxxx more xxxxxxx making xxxx the xxxxxx tax xxxxxxxxx for xxxx spouses xxxx be xxxxxxxx fully xxx planned xxx gifting xx to xxx annual xxxxxxxxx amount xxxx year xxx paying xxx a xxxxxxxxxxx medical xxx education xxxxxxxx A xxxxxxxx gift xxxxxxxxx known xx the xxxxxx exclusion xxx also xxxx indexed xxx inflation xxxx exemption xx this xxxx up xxxx the xxxxxxxxx amount xx last xxxx It xx set xx rise xxxxx few xxxxx with xxxxxxxxxx of xx a xxxxxx of xxxxx it x going xx be xxx couple xxx you xxx gift xxxx amount xx anyone xxx want x couple xxx gives xxx maximum xxx pass xx few xxxxxxx in xxxxx they xxx alive xxxxxxx concern xxx my xxxxxxx is xxxxx estate xxxxx While xxxx state xx Connecticut xxx a xxxxx tax xx gifts xxxxx states xxxx state xxxxxx taxes xxxxx have xxxx lower xxxxxxxxxx than xxx federal xxx For xxxxxxx in xxx Jersey xxx exemption xx In xxx York xxx Massachusetts xx is xxxxxxx I xxxxx suggest xxxx to xxxx to xxxxxx to xxxxxx like xxxxxxx that xxxx no xxxxx estate xxx Trusts xxxx formed xxxxxxxx can xxxxxxx estate xxx savings xxx reduce xxxxxxxx liability xx the xxxxxxxx owners xxxxx of xxxxxxx retained xxxxxxx trusts xxxxxxxxx grantor xxxxxx dynasty xxxxxx and xxxxxxxxx discounts xxx be xxxx substantially xx reduce xx eliminate xxxxxx gift xxx GST xxx liability xxxxxxxxx discount xxxxxxxxxx used xx determine xxxxxxx valuation xxxxxxxxx for xxxxxxx Estate xxx gift xxx purposes xxx be xxxxxx by xxx payers xxxx value xx the xxxxx that x hypothetical xxxxxxx buyer xxxxx pay xxx a xxxxxxxxxxxx willing xxxxxx would xxxxxx for xxx entire xxxxxxxx or xxxxxx In xxx absence xx an xxxxxx market xxx these xxxxxxxx this xxxxx generally xxxx reflect x discount xxx lack xx marketability xxx second xxxxx has xx do xxxx whether xxx interest xxxxxxxx transferor xxxxxxx is x controlling xxxxxxxx If xxx generally xxx value xxxx reflect x discount xxx lack xx control xxx discount xx necessary xx account xxx the xxxxxxxx reality xxxx a xxxxxxxxxxxx willing xxxxx would xxx be xxxxxxx to xxx a xxxxx equal xx the xxxxxxxx s xxx rata xxxxx of xxx value xx the xxxxxxxx or xxxxxx as x whole xxxxxxx valuation xxxxxx arise xxxx respect xx fractional xxxxxxxxx in xxxxxxxx properties xxxx real xxxxxx or xxx The xxxxxxxxxxx of xxx rule xxxx not xxxx well xxx property xxx which xx active xxxxxx exists xxx rule xxx proven xx be xxxxxxxxx to xxxxx to xxxxxxx held xxxxxxxxxx investment xxxxxxxx real xxxxxx unique xxxxxxxx personal xxxxxxxx fractional xxxxxxxxx in xxxxxxxx property xxx temporal xxxxxxxxx in xxx type xx property x taxpayer xxx reduce xxx value xx tangible xxxxxxxx such xx real xxxxxx or xxx by xxxxxx or xxxxxxx undivided xxxxxxxxx in xxxx property x percent xxxxxxxxx interest xx a xxxxxxxx or xxxxx of xxxx estate xx not xxxxx percent xx the xxxxx of xxx entire xxxxxxxx or xxxxx of xxxx estate xx a xxxxxxxxxxxx buyer xxxxxxx that xxxxx would xxx be xxxx to xxxx the xxxxxxxx without xxxxxx the xxxxxxx of xxx other xxxxxx or x partition xxxxxxxxxx Not xxx of xxx valuation xxxxxxxxx available xx donors xxxxxx life xxx available xx death xxx estate xxx law xxxxxxxx an xxxxxx to xxxxx its xxxxxxxxx in x particular xxxxxx or xxxxxxxx with xxxxxxxxx to xxx of xxx decedent x ownership xxxxxxxxx in xxxx entity xx property xxx example xx a xxxxxxxx dies xxxxxx percent xx the xxxxxx of x corporation xxx bequeaths xxxxxxx of xxx stock xx each xx five xxxxxxxxx legatees xxx law xxxxxx the xxxxx at xxxxxxx of xxx value xx the xxxxxxxxxxx as x whole xx contrast xx the xxxxxxxx gives x percent xxxxxxxx in xxx corporation xx each xx five xxxx during xxxx each xxxx enjoys x valuation xxxxxxxx If xx see xxx federal xxxxxx tax xxxx the xxxx years xxxxxxxxx on x person x death xxxx estate xxx liability xxxxx vary xxxxxx from xx nothing xx s xx millions xx dollars xxxxxx of xxxxxx tax xxxxxxxxx I xxxxx suggest x repeal xx the xxxxxx tax xxxxxxx because xx gets xxxxxxxxx only xxxx wealthy xxxxxx die xxx it xxxx not xxxxx enough xxxxxx revenue xx run xxx government xxxx for x few xxxx A xxxxxxx increase xx the xxxxxxx marginal xxxxxx tax xxxx could xxxx than xxxx up xxx the xxxx estate xxx revenue xxxx without xxx federal xxxxxx tax x am xx favor xx step-ups xx basis xx fair xxxxxx value xx accordance xxxx IRC xxxxxxx because xx difficulties xxxxxx tax xxxxxxxxx can xxxxx regarding xxx disposition xx estate xxxxxx especially xxxx the xxxxxxxxx assets xxx liquidity xxxxxxxxx to x surviving xxxxxx and xxxxxxxxxxx would xx substantially xxxxxxx Under xxx current xxxxxxx estate xxx law xxxx of xxx wealthiest xx American xxxxxxxxxx is xxx subject xx estate xxx liability xxxx is xxxxxxx of xxx large xxxxxx tax xxxxxxxxx presently xx million xxx spouse xxxxx means xxxx with xxxxxxx planning xxxxxxxxxx worth xxxx than xxxxxxx could xxxxx the xxxxxx tax xxx ultra xxxx Americans xxx support x lower xxxxxx tax xxxxxxxxx in xxxxxxxx for xxxxx concessions xxxx as x lower xxxxxxx estate xxx rate xxx ultra xxxx already xxxx many xxxxxx transfer xxxxx to xxxx with xxx IRS xxx Congress xxx fully xxxxx of xxxx of xxxxx There xxx also xxx as xxxxxxx households xxxx a xxx worth xx or xxxxx as xxxx as xxxxxxx These xxxxxxxxxx are xxxx likely xx need xxxx wealth xx sustain xxxxx standard xx living xxxx level xx wealth xx also xxxx likely xx dissipate xxxx one xx two xxxxxxxxxxx as xx is xxxxxx down xxx divided xx among xxxxxxxx beneficiaries xxx heirs x low xxxxxx tax xxxxxxxxx will xxxxxxxxx exacerbate xxxx dissipation xx wealth xxxxxxx of xxxxxxxxxxx estate xxxxx paid xxxxxxxx in xxx top xxx people xxx won xxx lottery xxx people xxxx into xxxxxx another xxxx of xxxxxxx There xxx entrepreneurs xxx investors xxxxxxx of xxxx are xxxxx notable xxxxxxx a xxxx number xxxxxxxx their xxxxxx over x long xxxxxx of xxxx through xxxx work xxxxxxxxx andsaving xxxx early xx their xxxx and xx managing xxxx they xxxxx A xxx estate xxx exemption xxxxx substantially xxxxxxx the xxxxxxxxxxxx of xxxxxx by xxxxxxxx on xxx lower xxx of xxx wealth xxxxxx If xxxxxxxx doesn x repeal xxx estate xxx a xxxx balance xxxxx be x per xxxxxx exemption xx with xxx maximum xxx rate xx greater xxxx References xxxx www xxxxxxxxxxxxxxxxxxxx com xxxxxxxx estate-planning xxxx www xxxxxxxxxxxx com xxxxxxxxxxxxxx publications xxxxxxxxxxxxxxxxxx pdf xxxx estateplanningcenter xxxxxxxx in xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx html xxxx thetrustadvisor xxx tag xxxxxxxxxx https xxx invesco xx publicPortal xxxxxxx nodePath xxx Repository xxxxxx library xxx estate xxxxxxxx TEESIG xxxxxxxMore Articles From Finance
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