Effects Of Inheritance Taxes

Section 152(a) provides that for a taxpayer to take a dependency exemption, the potential dependent must satisfy either the qualifying child requirement or the qualifying relative requirement. Section 152(b)(2) indicates that the taxpayer is not permitted a dependency exemption for a married dependent if the married individual files a joint return. Pursuant to section 152(c), the term “qualifying child” refers to an individual who has not furnished over one-half of his or her own support and who has not attained the age of 19 or who has not attained the age of 24, if a full-time student, as of the close of such calendar year. The term “qualifying relative” under section 152(d) includes, but is not limited to, an individual whose gross income is less than the exemption amount and to whom the taxpayer provides over-half of the total individual’s support for the calendar year in which such taxable year begins. Under Reg. Sec. 1.152 (a), support received from the taxpayer is compared to the entire amount of support which the potential dependent received from all sources, including support which the individual supplied himself. Support includes food, shelter, medical and dental care, education, recreation,

In regarding the Marriage of Dougall, appellant Richard Dougall appeals the trial court’s denial of his motion for reconsideration challenging their post-dissolution-decree order of spousal maintenance arrearages to appellee Myrna Dougall. He argues that Arizona Revised Statute 25-530 prevents the court from considering Veterans Administration (VA) disability benefits as income when calculating and determining the payment of arrearages of an award of spousal maintenance.

What potential tax problems might result if an individual pursues his plan to transfer 40% of the corporate stock to his two children as gifts? Would it make any difference if an individual received all voting stock and had the new corporation transfer nonvoting stock to his children?

Although the grantor trust rules generally address the taxability of trust income to the grantor, in some situations the Clifford trust doctrine has been extended to tax the income of a trust to someone other than the grantor. This happens when the powers granted enable a beneficiary to vest the corpus or income in the beneficiary. The seminal case of Mallinckrodt v. Nunan held that income of a trust was taxable to a beneficiary

1) The gift tax is a wealth transfer tax that applies to transfers during a person's lifetime and transfers at death.

-Spouse B’s $8,000/month for 11 months of income from work because these are taxable wages that are paid to Spouse be for employment.

A gift received for opening a bank account is not taxable income to the recipient.

They will qualify for five exemptions, one for each of the dependent children, all under the age of 19 and that they provide over half the support for, and one personal

The joint liability could cause issues for both parties if there were more tax liabilities or an audit was found in the IRS’s favor. When a joint return is filed personal exemptions are allowed for both spouses and exemptions for dependents can be claimed for all dependents.

Assuming Jackie’s husband passed away within the calendar year, Jackie can elect to file a single/surviving spouse or joint return. According to Section 86 of the Standard Federal Tax Reporter, if Jackie elects to file an individual return, her base amount and adjusted base amount are $25,000 and $34,000, respectively. If she instead elects to file a joint return, her base amount and adjusted base amount are $32,000 and $44,000, respectively.

Further complicating that tax scenario is what his heirs will owe in federal estate taxes. Attorneys said that estate taxes can be as high as 40% and will depend on Wilson's final arrangements.

A. Filing Status:  There are two choices of filing status available to this taxpayer couple, married filing separately and married filing jointly. For this taxpayer couple the recommended filing status is married filing jointly. The tax rates would be higher if they filed separately. Additionally, some deductions (e.g. tuition and student loan interest), credits (e.g. Earned Income Credit) and exclusions would not be allowed if they filed separately. Since they sold a personal residence during this tax year, they will be able to exclude up to $500,000 profit from the sales as joint filers rather than only up to $250,000 if filing separately. There will be 2 qualified personal exemptions and 3 exemptions for the 3

Estate planning addresses the distribution of assets prior to a person's death. With the estate plan, the court understands the deceased's final wishes and how he or she wishes their assets to be shared. For some, the process is simple, as the assets are jointly owned or aren't of high value. Others, however, have estates that require special consideration. This is true when there are children involved or the deceased was a partner in one or more

Married filing jointly with two personal exemptions and one dependency exemption for Steve. Steve meets the test to be Geneva and her husband’s qualifying child as follows:

The estate tax is a tax upon your right to transfer property at the time of your death. It is often called the death tax and it has been a partisan point of disagreement for quite some time. As the tax only applies to estates of $5.45 million and over, this tax only applies to the wealthy. Enacted in 1916 to help finance World War I, the estate tax has come under more scrutiny lately because of our government’s financial situation and the one-hundredth anniversary (Caron 825). The intellectual world is divided on whether to repeal, reform, or keep unchanged the estate tax. Some even argue that transfers of wealth should not be taxed at all. This essay will contend that the current estate tax should be replaced with a lifetime accessions tax to encourage donors, reduce concentrations of wealth, and safeguard equality of opportunity. Before arguing for the lifetime accessions tax, this paper will outline the history of the estate tax, the purposes of taxing wealth transfers, and compare the lifetime accessions tax to other proposed alternatives.