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 xxxxx tax-exclusive xxxxx 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 rsquo x spouse xxx Tax xxx made xxxxxxxxxxx permanent xxx portability xxxxxxxxxxx and xxx use xx portability xxx explained xx detail xx second xxxx Based xx the xxxxxx of xxx recent xx current xxxxxxxxxxx proposals xxxxxxx to xxxxxx taxes xxx proposal xx making xxx quot xxxxxxxxxxx amp xxxx of xxx Federal xxxxxx Tax xxxxxxxxx became xxxxxxxxx seems xx be xxxx viable xx addition xxxxxxxx introduced xxx concept xx portability xx the xxxxxx tax xxxxxxxxx between xxxxxxx couples xxx so xxxx has xxxx portability xxxxxxxxx allowing xxxxxxx couples xx add xxx unused xxxxxxx of xxx estate xxx exemption xx the xxxxx spouse xx die xx the xxxxxxxxx spouse xxx 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 xxxxx s xxx married xxx have xxx of xxxxx assets xxxxxxx titled xxx their xxx worth xx husband xxxx first xxx the xxxxxxx estate xxx exemption xx on xxx date xx his xxxxx The xxxxxx tax xxxx is xxxxxx Without xxxxxxxxxxx With xxxxxxx amp x estate xxx exemption xxxxxxxxxx wasted xxxx wife xxxxx dies xxx can xxxx pass xx free xxxx federal xxxxxx taxes xxxx wife xxx s xxxxxx will xxx about xx estate xxxxx after xxx death xxxxxx - xxxxxxxxx will xx taxable xxxxxx taxable xxxxxx x xxxxxx tax xxxx will xx Result xxxx Portability xxxxx the xxxxxxx of xxxxxxxxxxx of xxx estate xxx exemption xxxxxxx spouses xxxxx these xxxxx husband xxx s xxxxxx estate xxx exemption xxxx be xxxxx to xxxx amp x exemption xx turn xxxxxx wife x exemption xxxxxx - xxxxxxxxx taxable xxxxxx So xxx portability xx the xxxxxx tax xxxxxxxxx of xxx spouse xxxx save xxx heirs xx client xxxxx in xxxxxx taxes xxx new xxxxxxxxx limit xx made xxxxxxxxx at xxxxxxx indexed xx inflation xxxx a xxxxxxx tax xxxx on xxx amount xxxx that xxx taxes xxx exemptions xxx gifts xxxx during xxxxxxx rsquo 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 rdquo xxxxx federal xxxxxx taxes xxxx not xxx most xx the xxxxxxxx anymore xxxx group xxx other xxxxxxxx The xxx one xx state xxxxxx taxes xxxxx only xxxxx of xxxxxxxxxxx has x state xxx on xxxxx about xxxxxx have xxxxx estate xxxxx with xxxx lower xxxxxxxxxx than xxx federal xxx For xxxxxxx in xxx Jersey xxx exemption xx In xxx York xxx Massachusetts xx is xxxxxxx The xxxxx rich xxxxxxx have xxxx wealth xxxxxxxx tools xx play xxxx Contrast xxxx with xxx plight xx the 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 heirs xxx beneficiaries x higher xxxxxx tax xxxxxxxxx will xxxxxxxxx help xxxx wealth xxxxxxx of xxxx estate xxx paid xxxxxxxx is xxxxxxxx more xxxxxxx making xxxx the xxxxxx tax xxxxxxxxx for xxxx spouses xxxx be xxxxxxxx fully xxxxxxx for xxxxxxx up xx the xxxxxx exclusion xxxxxx each xxxx and xxxxxx for x descendents xxxxxxx and xxxxxxxxx expenses xxx ultra xxxxxxx are xxxx likely xx have xxxxxxxxxxxxx used xxxxxxx trusts xxxxxxxxxx lead xxx remainder xxxxxx dynasty xxxxxx family xxxxxxxxxxxx and xxxxxxxxx discounts xx reduce xx eliminate xxxxxx gift xxx generation xxxxxxxx transfer xxx tax xxxxxxxxx As x strategy xx mitigate xx eliminate xxxxxx taxes xxx transfer xx much xxxxxx as xxxxxxxx to xxxxx children xxxxxx the xxxxxxx estate xxx laws xxx given xxxxx of xxx interest xx this xxxx For xxxxxx and xxxx taxes xx particular xxx that xxxxxxxx has xxxxxxxxxxx set xxx estate xxx gift xxx exemptions xx million x level xxxx will xxxx with xxxxxxxxx all xxx the xxxxxxx of xxx richwill xxxxxxxx be xxxx to xxxxxxx their xxxxxxxx from xxxxx Planning xx geared xxxx towards xxxxxx sure xxx estate xxx exclusion xxx both xxxxxxx will xx utilized xxxxx and xxxxxxx for xxxxxxx up xx the xxxxxx exclusion xxxxxx each xxxx and xxxxxx for x descendents xxxxxxx and xxxxxxxxx expenses x separate xxxx exemption xxxxx as xxx annual xxxxxxxxx has xxxx been xxxxxxx for xxxxxxxxx This xxxxxxxxx is xxxx year xx from xxx exemption xxxxxx of xxxx year xx is xxx to xxxx every xxx years xxxx increments xx ldquo xx a xxxxxx of xxxxx it xxxxx s xxxxx to xx per xxxxxx and xxx can xxxx that xxxxxx to xxxxxx you xxxx A xxxxxx who xxxxx the xxxxxxx can xxxx on xxx million xx years xxxx are xxxxx rdquo 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 rsquo x pro xxxx share xx the xxxxx of xxx business xx entity xx a xxxxx Similar xxxxxxxxx issues xxxxx with xxxxxxx to xxxxxxxxxx interests xx tangible xxxxxxxxxx like xxxx estate xx art xxx application xx the xxxx does xxx work xxxx for xxxxxxxx for xxxxx no xxxxxx market xxxxxx The xxxx has xxxxxx to xx difficult xx apply xx closely xxxx businesses xxxxxxxxxx entities xxxx estate xxxxxx tangible xxxxxxxx property xxxxxxxxxx interests xx tangible xxxxxxxx and xxxxxxxx interests xx any xxxx of xxxxxxxx A xxxxxxxx can xxxxxx the xxxxx of xxxxxxxx property xxxx as xxxx estate xx art xx giving xx selling xxxxxxxxx interests xx that xxxxxxxx A xxxxxxx undivided xxxxxxxx in x painting xx piece xx real xxxxxx is xxx worth xxxxxxx of xxx value xx the xxxxxx painting xx piece xx real xxxxxx to x hypothetical xxxxx because xxxx buyer xxxxx not xx able xx sell xxx property xxxxxxx either xxx consent xx the xxxxx owners xx a xxxxxxxxx proceeding xxx all xx the xxxxxxxxx discounts xxxxxxxxx to xxxxxx during xxxx are xxxxxxxxx at xxxxx The xxxxxx tax xxx requires xx estate xx value xxx interests xx a xxxxxxxxxx entity xx property xxxx reference xx all xx the xxxxxxxx rsquo 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 xxxxx s xxxxx year xxxxxx tax xxxxxxxxx could xxxx wildly xxxx to xxxxxxx to x of xxxxxxxx of xxxxxxx ormore xx estate xxx liability x would xxxxxxx a xxxxxx of xxx estate xxx largely xxxxxxx it xxxx triggered xxxx when xxxxxxx people xxx and xx does xxx raise xxxxxx annual xxxxxxx to xxx the xxxxxxxxxx even xxx a xxx days x nominal xxxxxxxx of xxx highest xxxxxxxx income xxx rate xxxxx more xxxx make xx for xxx lost xxxxxx tax xxxxxxx Even xxxxxxx the xxxxxxx estate xxx I xx in xxxxx of xxxxxxxx in xxxxx to xxxx market xxxxx in xxxxxxxxxx with xxx Section xxxxxxx of xxxxxxxxxxxx income xxx liability xxx cause xxxxxxxxx the xxxxxxxxxxx of xxxxxx assets xxxxxxxxxx when xxx remaining xxxxxx and xxxxxxxxx available xx a xxxxxxxxx spouse xxx descendents xxxxx be xxxxxxxxxxxxx reduced xxxxx the xxxxxxx federal xxxxxx tax xxx most xx the xxxxxxxxxx of xxxxxxxx households xx not xxxxxxx to xxxxxx tax xxxxxxxxx This xx because xx the xxxxx estate xxx exemption xxxxxxxxx at xxxxxxx per xxxxxx Which xxxxx that xxxx nominal xxxxxxxx households xxxxx less xxxx million xxxxx avoid xxx estate xxx The xxxxx rich xxxxxxxxx may xxxxxxx a xxxxx estate xxx exemption xx exchange xxx other xxxxxxxxxxx such xx a xxxxx maximum xxxxxx tax xxxx The xxxxx rich xxxxxxx have xxxx wealth xxxxxxxx tools xx play xxxx the xxx and xxxxxxxx are xxxxx aware xx most xx these xxxxx are xxxx 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 xxxxxxxxxxxxx and xxxxx A xxx estate xxx exemption xxxx certainly xxxxxxxxxx this xxxxxxxxxxx of xxxxxx because xx significant xxxxxx taxes xxxx Included xx the xxx are xxxxxx who xxx the xxxxxxx and xxxxxx born xxxx wealth xxxxxxx form xx lottery xxxxx are xxxxxxxxxxxxx and xxxxxxxxx several xx whom xxx quite xxxxxxx However x good xxxxxx achieved xxxxx wealth xxxx a xxxx period xx time xxxxxxx hard xxxx investing xxxxxxxxx from xxxxx in xxxxx life xxx by xxxxxxxx what xxxx spend x low xxxxxx tax xxxxxxxxx would xxxxxxxxxxxxx curtail xxx accumulation xx wealth xx families xx the xxxxx end xx the xxxxxx ladder xx congress xxxxx rsquo 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
.ico)
.ico)
.ico)
.ico)
