How to Avoid Inheritance Tax PitfallsByline: By Jeremy GatesThe Birmingham Post (England)
Some people believe they can simply gift their house to their children to avoid inheritance tax. The idea is that if the house is in your children's names, then it won't be part of your estate for inheritance tax purposes. Gifting a house to your children can be classed as apotentially...
How can I avoid paying taxes on my inheritance? Inheritances are not considered income for federal tax purposes, whether you inherit cash, investments or property. However, any subsequent earnings on the inherited assets are taxable, unless it comes from a tax-free source. You will have to ...
Paying taxes is part of your inevitable financial routine. How do you plan for them? First, know your current tax bracket and check with your tax advisor to ensure you’re not having too much (or too little) withheld. It’s also a chance to review deductions and credits, and better...
If your financial support comes in the form of a large gift (the downpayment on a mortgage, for instance, or help paying off a student loan), consider positioning the gift as an early inheritance and adjusting your estate plan to avoid any potential sibling resentment. ...
Essentially, you have to decide which makes more sense: to pay estate tax on some of the inheritance at a rate of up to 35%, or pay capital gains tax on some of the inheritance when you sell assets (currently a top rate of 15%, although that could change). Consult with your tax ...
Even if you have a 401(k) or a traditional IRA, you may be able to avoid paying state taxes on withdrawals. Some states exempt from taxation your income from these types of retirement accounts. Using your home to boost your retirement income ...
However, there is one final way to avoid paying IHT, which is to spend all your money while you’re still alive! It seems that a growing number of people who fall into the ‘wealthy’ bracket are simply too concerned about running out of money in their old age. They are unwilling to...
If GST tax liability is a concern, you may wish to disclaim an inheritance. For instance, if you disclaim a parent’s assets, the parent’s exemption can shelter the transfer from GST tax when the inheritance goes directly to your children. The GST tax exemption for your own assets won’...
But if you're wondering how to define being wealthy, the question can be an interesting intellectual exercise. So if you're wondering if you're rich, there is a lot to consider. Becoming rich isn’t easy, especially if you’re starting from scratch and not getting an inherit...