Category Archives: Capital Gains Tax
Can a Charity Be a Beneficiary of an Estate?
The interest in charitable giving increased in 2020 for two reasons. One was a dramatic increase in need as a result of the COVID pandemic, reports The Tax Advisor’s article “Charitable income tax deductions for trusts and estates.” The other was more pragmatic from a tax planning perspective. The CARES Act increased the amounts… Read More »
What’s Happening to the Estate Tax?
Proposals now being considered by President Biden may expand the number of Americans who will need to pay the federal estate tax in one of two ways: raising rates and lowering qualifying thresholds on estates and increasing the liability for inheriting and selling assets. It is likely that these changes will raise revenues from… Read More »
Households with Higher-Incomes and Biden Tax Reform
As Americans look ahead to a Biden Harris Administration, noting the President-elect’s tax plan is crucial for higher-income households to understand and likely make adjustments to their financial and legacy planning. Generally speaking, the sweeping changes to the tax code will aim to levy higher taxes on corporations and high-income households. It will also… Read More »
Does a Beneficiary of a Trust Have to Pay a Tax?
When a trust makes a distribution, it deducts the income distributed on its own tax return and issues the beneficiary a tax form called a K-1. That form shows what part of the beneficiary’s distribution is interest income and principal. This tells beneficiaries what they must claim as taxable income, when filing taxes. A… Read More »
How Family Businesses Can Prepare Now for Future Tax Changes
The upcoming presidential election is giving small to mid-sized business owners concerns regarding changes in their business and the legacy they leave to family members. The recent article “How family businesses can come out on top in presidential election uncertainty, ” from the St. Louis Business Journal looks at what’s at stake. Tax breaks…. Read More »
How to Keep the Family Vacation Home in the Family
If this winter-like weather plus pandemic have left you wondering about how to get started on passing the family vacation home to the family or preparing to sell it in the future, you’ll need to understand how property is transferred. The details are shared in a useful article titled “Exit strategy for keeping the… Read More »
The Many Responsibilities of Inheriting a Home
When you inherit a home, there are three key factors to consider: the financial and legal responsibilities of the home, the tax liabilities of the home and what you’ll eventually do with the home. All of these different things relate to each other, explains Million Acres in “A Guide to What Happens When You… Read More »
Can You Explain the Concept of Step-Up Basis?
If you inherit assets—especially real property—you need to understand the step-up in basis rules. These rules can save you a lot of amount of money on capital gains and depreciation recapture taxes. Motley Fool’s recent article on this subject asks “What is a Step-Up in Basis?” The article explains that step-up in basis has… Read More »
As a Trust Beneficiary, Am I Required to Pay Taxes?
When an irrevocable trust makes a distribution, it deducts the income distributed on its own tax return and issues the beneficiary a tax form called a K-1. This form shows the amount of the beneficiary’s distribution that’s interest income, as opposed to principal. With that information, the beneficiary know how much she’s required to… Read More »
If My Mom Wants to Give Me Her House, Is It Better to Inherit or Buy It?
Say that your mom owns a house without a mortgage, and she’d like to transfer the house to her adult son and daughter. The issue is whether it’s a better strategy to make the transfer via gift or a sale. Let’s throw in the fact that the son is a U.S. citizen, but the… Read More »