Housing Planning And Estate Planning

Housing Planning And Estate Planning
Overview
Nearly everyone has an estate. Your estate consist of everything you own including your car, other real estate, personal possessions, home, furniture,
checking and savings account, investment, and life insurance, among others. Regardless of how large or small, each of us has an estate, and there is
one thing in common, you cannot take it with you when you pass away. When that happens (and note, it 's "when" and not an "if"), you probably want
to control how your estate are given to organizations or people you care about.
To make sure your wishes are put into practice, you need to provide instructions that state whom you want to receive something of you own, what you
want them to receive, and when they are to receive it Of course, you will want this to happen with the least amount paid in legal fees, court costs, and
taxes. All this process is what we refer to as fundamentals of estate planning. And estate planning is basically making a plan in advance and naming
whom you want to receive your estate.
Comparison Piece on Estate Planning from Trump and Clinton
Nevertheless, fundamentals of estate planning have not received the same view among people. For instance, current presidential aspirants, Donald
Trump and Hillary Clinton have totally different views about estate planning.
Trump 's View on Estate Planning and Estate Taxes
According to the GOP presidential front–runner, Donald Trump, the estate tax should be repealed. He made this clear when he reached out
... Get more on HelpWriting.net ...

The Current American Tax Code
A recent national survey conducted by the Pew Research Center on April 7, 2013 found that 56% of Americans have a negative reaction towards
income taxes. For this reason, most presidential candidates of both the Republican and Democratic Party, such as Ben Carson, Donald Trump, Hillary
Clinton and Bernie Sanders, maintain a fixed position on the way they think the current tax code should change. With all the issues and criticism the
current American tax code faces there is an ongoing debated on how it should be dealt with. This Paper will explore all four, of the previously stated
candidates' tax plans
Retired American Neurosurgeon and Republican Presidential Candidate Ben Carson's tax plan consist of the Income Tax section, which... Show more
content on Helpwriting.net ...
Carson's spending proposal includes "securing the border" (Ben Carson 2015) which would increase the number of agents at the border and other
homeland security enhancements which could cost up to $3.7 billion per year. Additionally, he also plans to create a "guest worker program" for
agriculture which would involve an administrative cost $102 million because he plans on maintaining health care protection for individuals who have
pre–existing conditions; this would add an extra cost of $2.5 billion per year (Brandy 2015). While Ben Carson's Tax Plan does not affect the
simplicity of the tax system, the extra undefined expenses his revenue system faces may affect the progressivity of the current American tax code.
On the other hand, Democratic Presidential Candidate and junior United States Senator Bernie Sanders has no specific proposal on ordinary tax or
itemized deductions; however, concerning rates on capital gains, resulting from the sale of capital assets such as stocks, bonds or real estate, and
dividends, or profits gained by the ownership of stocks divided by its owners, he does plan to increase the net investment income surtax to 10%
(Comparing the 2016 Presidential Tax Reform Proposals, n.d.). Sanders' plan also includes the termination of the postponement of tax on foreign
income, considered as money paid on foreign taxes to a foreign country on a foreign source income which is subject to United Sates tax

US V. Windsor: A Legal Case Study
In U.S. v. Windsor a same–sex couple (Windsor and Spyer) who met in 1963 and had been dating ever since registered as domestic partners in 1993
in New York. Worried about Spyer's failing health they went to Canada to get married in 2007. In 2009 Spyer died and left everything to Windsor. At
the time DOMA denied federal recognition to same–sex spouses, Windsor did not qualify for the marital exemption from the federal estate tax, which
excludes from taxation "any interest in property which passes or has passed from the decedent to his surviving spouse." 26 U.S.C. В§ 2056(a).
Windsor paid over 350,000 in estate taxes and sought a refund. She was denied because the IRS stated that under DOMA she was not a surviving
spouse. Windsor then filed suit ... Show more content on Helpwriting.net ...
The Appeals Court also found for Edith Windsor.
This case is landmark because the Court struck down part of DOMA. What this means is that same–sex couples who are legally married in their state
can now participate in federal benefits just like traditional married couples. At the time of this case, 2013, same–sex marriages were not legal across
America.
This is the first time that the government decided to let same–sex married couples have the same tax benefits as traditional marriages. What exactly
does this mean? It means that since same–sex marriages are only legal in 13 states plus Washington D.C. same–sex couples can only receive federal
benefits in those states. They can file taxes as married filing jointly, they can participate in their spouse's employee benefits, retirement benefits and as
in this case if a spouse dies the other can receive survivor benefits. The main thing to remember about this case is that it started out as an estate tax
case. Ms. Windsor started this because she felt she was entitled to Ms. Spyer's estate and was wrong and so she challenged the constitutionality of
DOMA. It is then that this case stopped being about estate tax and became about same–sex

Deductions from Gross Estate Under Philippines Tax Rules...
DEDUCTIONS FROM GROSS ESTATE
UNDER PHILIPPINES TAX RULES AND SINGAPORE TAX RULES
ADVENTIST UNIVERSITY OF PHILIPPINES
PUTING KAHOY
2008
DEDUCTIONS FROM GROSS ESTATE
PHILIPPINES TAX RULES
Funeral Expenses
For deaths occurring on or after January 1, 1998, the amount allowable as deduction shall be the lower amount between the actual funeral expenses
(whether paid or unpaid) and five percent (5%) of the gross estate, but in no case to exceed two hundred thousand pesos (P200,000).
Judicial Expenses 'Judicial expenses of the testamentary or intestate proceedings' are those incurred in the:
inventory taking of assets comprising the gross estate
their administration
the payment of debts of the estate
distribution of the estate among ... Show more content on Helpwriting.net ...
Debts are allowed for deduction if they are:
a.outstanding as at the date of death;
b.incurred by the deceased for his own use and benefit and
c.not reimbursable from another source
Debts are deducted against the value of the asset that is pledged as security. For example, a mortgage loan of a property shall only be deducted against
the value of the property regardless of whether the property is exempt from Estate Duty.
Quick Succession Relief (QSR)
When 2 persons died on or after 01 Jan 2006, and the later death occurred not more than 24 months after the earlier death, the estate of the later death
is entitled to QSR. Where the order of the 2 deaths is unknown, the younger person is presumed to have survived the older person and inherited the
older person's assets. Each estate is assessed separately and the exemptions under the Estate Duty Act will apply separately on each assessment. For all

quick succession deaths, a relief of varying amount would be given depending on the time period between the two deaths, as shown in the table below.
Period between two deathsPercentage of relief
6 months or less100%
More than 6 months but not more than 12 months75%
More than 12 months but not more than 18 months50%
More than 18 months but not more

Introduction Of Inheritance Tax ( Iht )
Introduction to Inheritance Tax (IHT)
Inheritance tax or IHT is becoming more of a concern to many people.
Most properties or assets you leave after you pass away are not being charged with inheritance tax because their cumulative value isn't high enough.
However more properties are being dragged into the net of IHT due to the increasing real estate prices but with careful planning there's a lot that can be
done to soften the effects of Inheritance Tax.
Who is liable to pay inheritance Tax?
Individuals with permanent address in the UK are caught by IHT on assets they own anywhere around the world. Individuals with permanent address
outside the UK only pay UK inheritance tax on assets that are physically located in the UK, but they may be liable to pay foreign inheritance tax on
non–UK assets in their home countries.
Exempt transfers
Many gifts are exempt from Inheritance Tax. The most common ones include...
п‚§Small gifts to any individual during a fiscal year, which doesn't not exceed ВЈ250;
п‚§Gifts in relation to a marriage; ВЈ5,000 if made by a parent of one of the newlyweds; ВЈ2,500 if made by a grandparent and ВЈ1000 if made by
anyone else;
п‚§Gifts that are a part of your regular expenditure out of income and which does not decrease your net income below the amount needed to maintain
your normal living standard;
п‚§Annual transfers below ВЈ3,000. Any unused amount may be carried forward for 1 year only;
п‚§Gifts to charities & registered amateur sports clubs;
п‚§Gifts to

Defense Of Marriage Act Ruled Unconstitutional
Defense of Marriage Act Ruled Unconstitutional:
How the Supreme Court's Ruling on DOMA Will Affect Same
–Sex Taxpayers
Melissa Williams
Troy University
November 20, 2014
Author's Note
This paper was prepared for Federal Tax Research 6684T, taught by Dr. Kaye Sheridan.
Abstract
On June 26, 2013, The United States Supreme Court struck down Section 3 of the Defense of Marriage Act (DOMA), enabling same–sex couples
legally married under state law to be recognized for the purpose and benefit of federal law. Section 3 of DOMA previously defined marriage as the
legal union of two persons of the opposite sex. This definition was challenged in several court cases for violation of the Equal Protection Clause of the
Fifth Amendment. The Supreme Court ruled in favor of Edith Windsor in U.S. v. Windsor, declaring DOMA Section 3 unconstitutional and allowing
same–sex couples to be recognized as married for federal purposes. This opens up several opportunities within federal income tax and estate and gift
tax. Some of these benefits include higher standard deductions and gain exclusion; opportunity to lower tax bracket through combining incomes; and
entitlement to the marital deduction, gift splitting, and portability of DSUE. Marriage also results in tax disadvantages such as the marriage penalty,
joint and several liability, and refund offsetting. Taxpayers and tax preparers should be aware of the new planning opportunities available to married
same–sex couples,

Major Benefits Of Estate Planning Essay
Critical Element III. A Estate planning enables individuals and business owners to plan for the future in cases when unforeseeable events occur. If an
unforeseeable demise does occur, the business will continue to thrive and business assets will be protected from creditor and government seizure. A
few of the more prominent benefits of estate planning include the following: succession planning, future planning, and minimizing tax liability. All three
benefits significantly correlate with one another since deciding business successors lead to anticipated future success and figuring out what to do with
future assets in the present helps minimize future tax liability. By creating trusts, business owners can still appreciate assets without the need to pay
heavy taxes on the additional value. However, it is crucial to understand that estate planning differs among business entities in terms of minimizing tax
liability (Agu 2016). A principle difference between the two business entities is how the business owners are impacted by the tax liability.
C–Corporations are classified as being a separate taxable entity while partnerships are flow–through entities. As a separate taxable entity, C–corporation
business owners are not responsible for paying taxes regarding to the business, but they are taxed on the shareholder dividends; a concept otherwise
known as double taxation. On the other hand, partnerships handle taxes a little differently. The resulting operating income is

The Rise Of Wilsons Tax Reform
Tax reforms started in 1916 when the Wilson administration decided to cooperate with a group of insurgent democrats on war time financing, which
was majorly progressive taxation. This was important because it led to attacking the wealthy, special privilege, and public corruption. The
administration embraced this taxation as "means to achieve social justice." Another major element to Wilsons administration was redistributional
taxation. This helped drive between socialism and unmediated capitalism. The major debate at the time was over the question, " What stake does
society have in corporate profits?" The debates outcome created "soak–the–rich" income taxation. Wilson signed the Revenue Act of 1916. This was
the first tax on personal incomes.

The Death Tax and the Death of Family Farms Essay
Relief from high inheritance taxes expires at the end of December, 2012. In the article "A Storm of Estate Taxes Threatens Farm Country," Lynne
Finnerty says that the new estate tax exemption will drop to one million dollars and the tax rate will increase to fifty–five percent (Finnerty). Lowering
the estate tax exemption while increasing the rate may consequently cause the liquidation of many multigenerational family farms and an ultimate
decrease in the world's food supply. Comprehending the effect of estate taxes on farm families requires a general understanding of farm economics.
In Illinois, for example, there are 76,000 farms and more than 28 million acres of farm land. Therefore, the average farm size is 368 acres, including ...
Show more content on Helpwriting.net ...
In "Kill the Death Tax," the author states, "The estate tax falls hardest on those who maintain a family business or farm. When the cost exceeds cash
assets, the estate tax can force family business owners and farmers to sell in order to pay the tax" ("Kill the Death Tax"). Unfortunately, there are
journalists and politicians who attempt to convince the American public that this problem does not exist. Senator Bernie Sanders writes in "Tax Code
Must Stop Coddling the Rich," "Some Republicans argue that eliminating the estate tax would save family farms and small businesses. Not true,
though this argument has been tried before" (Sanders). A simple analysis of farm economics proves that Senator Sanders is misleading the American
public. In 2012, a 368–acre farm inheritance in Illinois would create an estate tax bill of $623,920. The same farm planted to corn, has the potential
to generate an income of $17,664, which is obviously not enough cash to pay the tax. Therefore, the only solution may be to sell part of the farm
ground in order to pay the tax, which could hinder the viability of the farming operation. In addition to bankrupting family farms, the mere existence
of the death tax is unfair. Assets that are liable to estate taxes involve money that is being taxed for the second and sometimes third times. "It taxes
assets which have already been subject to the federal payroll, income and/or capital gains

Generation Skipping Tax
Generation Skipping Transfer Tax
INTRODUCTION AND ISSUE
The United States generation skipping transfer tax imposes a tax on gifts and transfers to people more than one generation younger than the donor. An
example is a grandparent giving a gift to a grandchild, in turn skipping their own child. Grandparents would give a gift to their grandchildren to avoid
or defer federal gift taxes, but this is now subject to a generation skipping tax.
Congress passed the original generation–skipping transfer tax in 1976 to go along with the federal gift and estate tax system to make sure that the
transfer of wealth from one generation to the next would have the same tax effects. The most common tax planning strategy was to pay income to one's
child for the child's life and then distribute the trust property to his or her grandchildren at the child's death before this legislation.1
The generation skipping tax that is applicable today became effective under Sec. 1433(a) of the 1986 Act on October 22, 1986. 1 This applies to all
existing revocable trust, current wills and inter vivos transfers made after September 25, 1985. 1 The generation skipping tax was designed to keep
people from a loophole in the estate tax. The grandparents would leave their estates to their children. The child would get hit with the estate taxes. The
child would pass on the estate to the grandchildren who would also get hit with the estate taxes. Individuals realized that they could just leave their
estates to

Tax Lien Investing In Real Estate
It is still possible to make money with real estate. Despite the housing market problems of the last several years, there are still ways to invest and earn
an income with properties. While many people immediately think of rental properties as offering steady income, there is also tax lien investing.
Although some infomercials make it seem that you can own a property by just buying the tax lien, the reality is that property tax lien investing is far
more complicated than those infomercials want you to believe. What is Tax Lien Investing? Owners ofreal estate have to pay annual property taxes.
These taxes pay for community services and social programs. The county depends on this money. If a homeowner has financial difficulties and becomes
... Show more content on Helpwriting.net ...
How to Learn About Tax Lien Investing There are late–night infomercials offering systems about how to make a lot of money with tax liens. Although
these systems make it seem easy and simple to get a house just by paying the overdue property taxes, tax lien investing can be complicated and
drawn out, especially if you decide to foreclose. And with so many programs available to help homeowners facing foreclosure, there is no guarantee
the foreclosure will go through. The most an investor should hope for is to get back the invested money plus interest. Because tax lien investing is
such a complex process, the only way for investors to really be successful is to learn the laws about property tax liens for their state. It is a good idea
for would–be investors to contact the country clerk's office or other government agency in their state and request information on the tax lien auction
process. With tax lien investing, investors get a high rate of return for a few years while county governments get the money they need. This type of
investment is not for everyone and it is certainly not a get–rich–quick scheme. For informed investors with patience, tax lien investing can be a good
way to make a fixed income

Modern Estate Tax Evolves: 1916 To 1975
The Modern Estate Tax Evolves: 1916 to 1975– In the early 20th century, worldwide conflict cut into trade tariffs––a mainstay of federal
revenues––and Congress turned to another revenue source. The Revenue Act of 1916, which introduced the modern–day income tax, also contained an
estate tax with many features of today's system. After an exemption of $50,000 (over $11 million in terms of today's wealth), tax rates started at 1
percent and climbed to 10 percent on estates over $5 million (over $1 billion in terms of today's wealth). Estate taxes were increased in 1917 as the
U.S. entered World War I.
However, this time the estate tax did not go away after the war ended. Despite sizable budget surpluses, Congress increased rates and introduced a
gift tax in 1924. Like the estate tax, the gift tax is a levy on the transfer of property from one person to another. During the 1920s through the 1940s,
estate taxes were used as another way to attempt to redistribute income. Tax rates of up to 77 percent on the largest estates were supposed to prevent
wealth becoming increasingly concentrated in the hands of a few. ... Show more content on Helpwriting.net ...
Specifically, it expanded the tax base to include most life insurance proceeds, which could substantially raise an estate's tax bill.
Reshaping Federal Transfer Taxes: 1976 to the Present– During the late 1960s and early 1970s loophole closing preoccupied tax reformers. These
efforts culminated in a 1976 tax bill that overhauled estate taxation, giving us the system we still have today. Perhaps the biggest change was combining
the previously separate exemptions for estate and gift taxes and transforming them into a single, unified estate and gift tax credit.
The most significant changes to the federal estate tax occurred with the Tax Reform Act of 1976. The Act enacted the following

Gift And Estate Planning Case
This is the usual end phase of financial planning, wherein the transfer of assets to beneficiaries are taken into consideration, by sorting out estate taxes
and other requirements (Moneysense 11).
The "estate freezes" is one concept that is related with estate planning. In line with business, the concept works as follows: The business owner who is
near the retirement period may decide to "recapitalize" the business by offering two classes of stock, namely voting preferred and nonvoting common.
The business owner is privileged to have the preferred stocks, while the common stocks are "gradually gifted" among her children, as a way to reduce
tax costs (as a form of gift tax transfer). Thus, Meg can actually use the technique of "estate freezes" in transferring the ownership of her business
among her children ("Gift and Estate Tax Planning" 14–9).
Meg can also optionally use "installment sales as a freeze strategy" (Gift and Estate Tax Planning 14–9). Under this strategy, upon the death of the
seller and she has not completely received all the installment payments, the estate will only include the "face value of the remaining installments ...
Show more content on Helpwriting.net ...
Meg can actually use trusts in transferring "the remainder interest" of the life estate using three options: Grantor Retained Income Trusts (GRITs),
Grantor Retained Annuity Trusts (GRATs) and Grantor Retained Unitrusts (GRUTs). One advantage is in the form of tax savings. However, the
disadvantage lies on the notion that upon the death of the grantor before the expiration of the income interest, the asset value will be included in the
"grantor's gross estate (as more specifically related under Code Sec.2036(a) ( as cited in "Gift and Estate Tax Planning" 14–10). For the case of Meg
and Maynard, GRUT can be preferable and more relevant, such that the investment portfolio can be associated as speculative and with high stock

Transfer Of 40 % Ownership
A.Transfer of 40% Ownership As a sole proprietorship, Mr. Jones owns 100% of his used car dealership. He has full authority to make big business
decisions and reports business income from the Schedule C to his Form 1040. He is currently deciding on re–electing his business and giving his
daughter 40% ownership of the business. When a current owner brings in new business associates, allocating a percentage of ownership is crucial.
The individual with majority share has the voting power to make or break critical business decisions. An even 50/50 spilt might create a deadlock
which could negatively impact the business. For example, another used car dealership wants to buy Mr. Jones' business. Mr. Jones thinks the sale is
a good idea, but Mandy is completely against it. Since the two are in a deadlock, the interested company may back out of the offer if a decision is
not immediately made. Using the same scenario with the 60/40 split, Mr. Jones is a majority shareholder and has the voting authority over Mandy to
accept the offer despite any rejections (Duff 2016). Financially speaking, the duo is better off with the 60/40 split. The S–corporation election allows
for income and deductions from the business to flow down to the taxpayers. If Mr. Jones decided to stay a sole–proprietor, he claims the entire
$1,200,000 on his Form 1040. If he decides to elect the S–corporation status with a 60/40 split, he claims $720,000 of the business' income, as well as
60% of the business'

The Importance Of Real Property
Statutory deferral when real property is transferred to a corporation with FMV higher than the tax basis.
The law provides three exceptions where the transfer of Real property to a corporation with market value higher than the basis is not taxable; 1. The
transferor owns more than 80% of voting stock of the corporation immediately after the transfer 2. The transferor and a group, simultaneously transfer
real property to a corporation and own more than 80% of the corporate voting stock immediately after the transfer. 3. The transferor already owns 80%
voting stock of the corporation and any additional transfers do not trigger gain. The above transfers only deferred the gain but did not exempt it,
pursuant to В§ 351. Corporation takes ... Show more content on Helpwriting.net ...
IRC В§ 721, which dictates transfer of property to partnership, is comparable to В§351 except it does not have an 80% or more ownership constraint,
you could own 1% of partnership interest & the transfer would still be tax free. In addition, basis rules are like corporate rules upon transfer. The
similarity ends from this point forward, in cases where property is subject to liability, the partner would adjust its basis in the partnership. Gain, if
triggered due to partner's liability decrease, termed deemed distribution, recognition of this gain could be circumvented by adjusting the transferor's
outside basis, hence no recognition of gain either by the partnership or the partner. In case of liquidating or non–liquidating distribution interplay of
sections in partnership law avoids the recognition of gain, and in both cases basis is adjusted instead. Gain is only triggered when the transferor sells
property received in both liquidating and non–liquidating scenarios.
International investors investing in US real estate:
With real estate investment returns hovering between 14% to 21%, combined with the relative safety of US markets and additional tax in Canada for
Nonresident real estate investors, no wonder investment in US real estate is way up according to a recent report. Topping this list are Brazilian,
Chinese, Canadians, Colombians and Middle Easterners who are investing heavily in Miami real estate,

Easement
A conservation easement is a legal, binding agreement between a landowner and a conservation organization that restricts the development and future
use of the land to achieve a conservation objective. Each easement is unique to the parcel it is designed to protect and to the needs of the landowner
donating the easement. There are term easements that exist in some states but not Colorado. Aconservation easement of the land is binding with the
landowners and future owners as well.
Landowners who grant easements give up some of their full ownership rights in the property but can be sure that his land will be protected forever.
The easement holder is responsible for enforcing the restrictions of the easement. He may be eligible for ... Show more content on Helpwriting.net ...
Federal estate tax deduction and exclusion: Conservation easement limits future uses of land; it also limits the value that can be assigned to property
for estate tax purposes. This estate tax "deduction" can lower estate taxes significantly, and can help heirs to keep family land, rather than sell it to
pay the estate tax. The federal Taxpayer Relief Act of 1997 created additional estate tax benefits for donors of conservation easements. There is an
exclusion from estate tax of up to 40% of the value of land subject to a qualified conservation easement, up to $500,000. A post mortem election
whereby the heirs or executor of an estate may grant a conservation easement following the death
State property tax benefit: In 1995 the Colorado Legislature passed House Bill 1268, modifying property tax law to encourage land conservation. HB
1268 allows farmers and ranchers who have protected their land from development with a permanent conservation easement to take their land out of
production without losing their favorable agricultural property tax classification. The law enables the preservation of precious farm and ranch land by
giving farmers and ranchers an option they did not previously have – the option to retire or to suspend an operation due to market, natural, or other
conditions.
However, there are several issues that the IRS has with

The General Purpose Of An Estate Freeze
1. Explain what the general purpose of an estate freeze is and why it could be advantageous to Phyllis and Freddie. An estate freeze with respect to
Phyllis and Freddie's family business corporation allows them to fix the value of their shares in the business at a particular date and create an
opportunity for Phyllis and Freddie to transfer the future growth of a business, investments, or other assets to other taxpayers, children or other
designated beneficiaries. By freezing a beneficiary's estate, they will have to pay tax on the growth which results in a tax deferral until the beneficiary
passes away or they will have to dispose of his/her shares. Phyllis and Freddie can redeem the preferred shares at any time; the preferred shareholder
still has control over the assets. If they qualify as a qualified Small Business Corporation, one can multiply the number of capital gains exemptions by
increasing the number of taxpayers who are shareholders. In addition, Phyllis and Freddie can transfer the asset to the children to who they would like
to appoint from their company. The growth in value of which will not be subject to a challenge of their Will under the Wills Variation Act. It can
prevent future family disputes and help the estate equalization. When Phyllis and Freddie transfers the preferred shares to their children, it creates the
commitment for the children to take over the ownership of the company. Phyllis and Freddie can also maintain control of the

An Passive Activity Loss Rules
Introduction
For persons dealing with real estate property, the use of the aggregation election to meet the material participation test may have a significant impact on
their tax liability. There is a lot of confusion surrounding this topic for taxpayers, CPAs, and lawyers alike. A thorough understanding of the mechanics
and the advantages and disadvantages of the real estate professional's use of the aggregation election to meet the material participation test is crucial
for any persons dealing with real estate property.
The Internal Revenue Code (referenced later as "IRC" or "the Code") separates all income/loss into three categories: (1) Active income/loss, (2)
Portfolio income, and (3) Passive income/loss.
Due to the government's ... Show more content on Helpwriting.net ...
Active income/loss v. Passive income/loss
In order to properly understand why a taxpayer would rather have active income/loss versus passive income/loss, one must first understand the
differences between these two types of income/losses and how they are treated for tax purposes.
A trade or businesses is considered a passive activity according to the IRC if the taxpayer does not materially participate in that respective trade or
business. Any income or loss derived from the passive activity is to be treated as passive income/loss. Additionally the Code automatically classifies
income/loss from most rental activities as passive, regardless of whether the taxpayer materially participated or not. Net losses generated from passive
activities cannot offset income from portfolio or active income. If a taxpayer's passive activities result in net income, then the income must be reported,
but if they result in a net loss then the loss must be suspended until they generate passive income to offset the loss.
Inversely, active income/loss is any income derived from wages and profit or loss from a trade or business where the taxpayer materially participated
in the corresponding tax year. Active income/loss is more attractive than passive income/loss to a taxpayer is that net active losses are fully deductible
in the corresponding taxable year, rather than having to be suspended until it can be offset by

Corporate Tax, Cost of Debt, Cost of Equity and Capital...
Corporate Tax, Cost of Debt, Cost of Equity and Capital Structure: A case study of REITs and conventional real estate firms in the UK
University of Groningen
Faculty of Economics and Business
BSc International Business
January 2013
Table of contents
1. Introduction4
2. REITs7
3. Literature Review9 3.1 Capital Structure Irrelevance9 3.2 Present Models10
4. Data and Methodology12 4.1 Regression12
5. Findings and Discussion16
6. Conclusion20
7. Appendix21
8. Bibliography30
Abstract
In January 2007 the UK adopted the globally successful real estate investment trust (REIT) regime, allowing real estate firms to adopt the REIT status
with the benefit of immediate exemption from ... Show more content on Helpwriting.net ...
Furthermore, I expect that REITs use relatively less debt for financing, because of the relatively higher cost of debt.
Already in 1958, Modigliani and Miller have pointed the discussion of capital structure towards the cost of debt and equity. According to their first

proposition, in a world of no corporate taxes and with perfect markets, financial leverage has no effect on a firm's value. In their second proposition,
they state that the cost of equity equals a linear function defined by the required return on assets and the cost of debt (Modigliani and Miller, 1958).
As negative aspects of debt, e.g. personal tax loss and bankruptcy costs however do exist in reality, Miller (1977) elaborates that leverage will either
have no or a negative effect on the firm's value, hence untaxed firms should favor equity.
Nevertheless, firms have used leverage even before corporate taxes have been introduced (Maris and Elayan, 1990). This implies the existence of some
market imperfections, which benefit the use of debt financing, thus enable a trade–off of the cost and benefits of debt resulting in an optimal capital
structure, where marginal cost equal marginal benefits.
In general, the majority of existing research is set up by taking the security issuance choice as the dependent variable and then tests empirically for
determinants based on data from one type of companies. It needs to be taken into consideration that security issue decision and capital

Essay about ESTATE GIFT TAX P5
Problem 5
(1) Grantor creates a trust with income to Spouse for life, remainder to Child if living and, if not, reversion to Grantor or Grantor's estate.
(a) If Grantor predeceases Spouse and Child, is Section 2037 applicable to the transfer?
No. Section 2037 is not applicable to the transfer.
Based on Section 2037, " The value of the gross estate shall include the value of all property to the extent of any interest therein of which the decedent
has at any time after September7, 1916, made a transfer, by trust or otherwise, if (1) possession or enjoyment of the property can, through ownership of
such interest, be obtained only by ... Show more content on Helpwriting.net ...
In this case, Section 2037 does not apply because that grantor does not have a reversionary interest. And also A can possess or enjoy the property
without surviving the decedent.
What are included?
Since section 2037 does not apply in this case, and the decedent made the gift within three years of death. Section 2035(a) invoked to cause inclusion in
the gross estate.
Based on section 2035(a), " If (1) the decedent made a transfer (by trust or otherwise) of an interest in any property, or relinquished a power with
respect to any property, during the 3–year period ending on the date of the decedent's death, and (2) the value of such property would have been
included in the decedent's gross estate under section 2036, 2037,2038, or 2042 if such transferred interest or relinquished power had been retained by
the decedent on the date of his death. The value of the gross estate shall include the value of any property (or interest therein) which would have been
so included. "
As a result, the value included in the decedent's estate is still the full property less the value of the spouse's outstanding life estate.
(c) Grantor creates a trust with income to S for life, remainder to A if living and, if A is not living, reversion to Grantor if Grantor is living; if Grantor
is not living, remainder to

Acc 456 Short Answered Questions
Short Answer Questions
ACC 456
August 27, 2012
Short Answer Questions В· What constitutes self–employment income? What are the requirements for estimated tax payments by self–employed
individuals? Individuals who work for themselves and make money to do so constitute as self–employment income. Independent contractors and sole
proprietors are considered self–employed. They receive all payment without withholding any Social Security tax, Medicare tax, state tax, and etc. They
do however have self–employment tax, which is taken out when the individual file Schedule C or C–EZ on their tax return. They would also need to
file a Schedule SE. As of 2011, self–employment tax is 13.3% of the individual's net earnings. Of ... Show more content on Helpwriting.net ...
Each person has a certain amount that he or she can transfer over the course of his her life and death completely tax free. The amount of the unified
credit change depends on the year. This means that people do not pay any tax even on taxable gifts. Instead the amount of the taxable gift comes off
their unified credit. Once the unified credit is depleted, then the transfers start actually being subject to taxation. В· What are the annual and lifetime
gift tax exclusions and the estate tax exclusion? Under the United States federal law states that an individual can give $1 million of taxable gift
over the course of his or her life time and not pay any tax on them. Also any of the gifts needs to be unified credit and should display his or her final
estate taxes. For example if the husband and mother gives their one kid a gift of $13,000 over the 60 year time period which reflects on the percentage
share in their Business would not be consider a taxable gift which is up to $ 1 million but anything over would be eligible for taxes. The estate tax is
very simple and clear which shows the anyone who is eligible for receiving a gross assets and prior taxable gifts exceeding $1.5 million in 04–05, $2
million in 06–08, $3.5 million in 09, and $5 million for 2010 and later which means if the assets are exceeding these amounts are subject

The Tax Should Be Replaced With A Lifetime Accessions Tax...
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 estatetax 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. Additionally, this paper will compare the lifetime accessions
tax to other proposed alternatives. In place for over one–hundred years now, the estate tax was put into place to do more than just finance World War I.
In 1916, there were extremely wealthy families, such as the Vanderbilt's and the Carnegie's, that dominated industries and held a large portion of the
nation's wealth. Part of the purpose of the estate tax was to curb massive amounts of inter–generational wealth that was common amongst these
families. The government saw the money being passed down from generation to generation as an opportunity for more revenue and a burden upon an

Essay On California Tax
California's tax code is unreasonable. It appears to be improving, with the rich paying higher tax rates than the poor. However, the poorest are still
paying the greatest fraction of their income to the state because of sales taxes. Depending on local municipalities, state and local sales taxes can reach
9.25% in many cities and can be as high as 10.0%.
Many companies and businesses have already left California to escape high corporate income taxes. They've relocated to states without income tax,
where they can save up to 13% more of their income. The seven U.S. states with no income tax (Alaska, Florida, Nevada, South Dakota, Texas,
Washington and Wyoming) have become a beacon for growth. They're outperforming California in job creation as... Show more content on
Helpwriting.net ...
This is a proposal to reform California's taxes. Instead of taxing Californians' businesses, which can just simply relocate to another state, California
should tax mainly what can never leave its borders––its real estate. In addition, California should stop state income and sales taxes.
This is a very feasible proposal. Many states like Texas and Florida have no income tax and lower sales tax, but higher property taxes at 2% to 3%,
compared to California's property tax of 1%. California's state tax revenue is comprised of 31.2% property taxes, 30.1% sales taxes, and 31.7%
individual and corporate income taxes. If the property taxes were raised to 3% or 4% for all property, including houses and commercial and
investment real estate, sales and income taxes will no longer be necessary.
Although tripling the property tax bill will alarm many, it will be compensated by no state sales tax (highest at 10.0%) and income tax (highest rate at
13.3%). Eliminating the income tax will increase take–home pay for everyone. The state will appear more attractive than its neighboring states and
thus, draw new businesses, create jobs, and trigger an influx of talented workers. This will then induce rising house demands as more people and
companies relocate to California to reap the tax benefits and will make up the expected decline in house

Estate Tax Planning Proposal
Estate Tax Planning Current law for estate tax, gift tax, and generation skipping transfer tax is a 35% rate with an exclusion of $5.12 million. This
is scheduled to change on January 1, 2013 to a 55% tax rate with an exclusion of $1 million. Due to the scheduled change, it would be advisable to
be very aggressive in tax maximization before December 31, 2012. Pending congressional action, there is a proposal to for a 45% tax rate with an
exclusion of $3.5 million for estate and generation skipping transfer tax and an exclusion of $1 million for gift tax (General Explanation of the
Administration's fiscal Year 2013 Revenue Proposals, 2012). This proposal is more viable because it gives a greater exclusion on the estate tax.
Even though the tax rate is higher and the exclusion is lower, it would provide more tax breaks than the scheduled change because the exclusion is
$2.5 million higher. There are two ways of transferring wealth to children and maximizing the estate taxes. For the year of 2012, a total of $13,000 a
year can be given to an individual, $26,000 if married without paying taxes (Get ahead of your estate planning). For the year of 2013, the amount will
be $14,000 per individual with no restrictions on who the gifts are given to or how many recipients the gifts are given to (Estate Planning: Transferring
Wealth and Tax Planning). There is also the ability to pay medical and education expenses for someone to the respective institutions. Certain trust funds

Common Estate Case Study
When closing an estate, most states that use a formal probate process, allow for an informal closing for common estates. These states simplified the
probate process for estates that are straightforward; not complicated or contested. Fortunately, Massachusetts is one of those states. In Massachusetts,
closing an estate using the simplified probate process involves the following tasks:
1)Complete a final inventory of assets.
2)Using the inventory of assets in the final accounting, complete the final accounting.
3)Under cover of an assent form, send copies of the inventory of assets and the final accounting to each beneficiary.
4)After receiving the signed assent forms from each beneficiary, the executor must sign the form called ... Show more content on Helpwriting.net ...
3)Schedule C – Schedule C is the remaining balance of the estate. In common estates, the balance should be zero. Simply put, the total in Schedule A
must equal the total in Schedule B to produce a zero balance in Schedule C. Furthermore, filling in these schedules with the appropriate values is a
collaborative effort. At times, throughout an estate administration, there are legal matters that the attorney must handle. If these matters produce
income or expenses for the estate, the attorney should enter those values on the appropriate schedule. So, if the account doesn't balance in the initial
attempts, the attorney will most likely step in to help find any discrepancies if needed.
Once the final accounting balances, then the attorney will continue with the rest of the closing process mentioned above. At this point, the only
remaining task for the executor is to distribute the rest of the property in the estate after signing the account form.
.
The Informal Closing of an Estate
Although an estate may close informally, it doesn't mean that a probate court won't request information at a later date. Therefore, the executor should
hold on to the original documents related to the informal closing. In addition, the executor should retain supporting documents related to entries in the
final accounting such as receipts, bank statements, and brokerage statements. Basically, all an executor needs to do is store all the documentation used
to produce the

The Estate Tax Should Be Controlled
Introduction
Arguably, most Americans tend not to worry about their accumulated wealth once their dead. It is our right to have our accumulated wealth, also called
Gross Estate, transfer over to our designated beneficiaries. However, before we die there are some considerations that must be made. The U.S. Internal
Revenue Service has stated that the filing of an estate tax return is necessary for amounts over certain thresholds. These federal thresholds have
exempted many Americans from having to worry about filing for estate tax. Yet, there are state estate taxes that can be particularly burdensome as
Forbes magazine article puts it in its article "Where Not To Die In 2013". The context of this research document is accounting by nature,... Show more
content on Helpwriting.net ...
It would be wise for a taxpayer to elect a trustworthy executor as well as carefully designate your beneficiaries. In essence, estate tax is the federal
governments method of imposing a tax on property when transferred to a beneficiary upon death of the owner. This tax includes but is not limited to
insurance, business interests, annuities, real estate, trusts, cash, and securities (irs.gov). These assets or interests that have been accumulated up to the
date of death make up what is called the Gross Estate (irs.gov). Valuation of the Gross Estate is an important aspect of the estate tax process since it is
an important measurement in order to determine whether the estate qualifies to be taxed or not. The Internal Revenue Table of Basic Exclusion
Amounts (See Fig. 2) shows the exclusion amounts in recent years.
The fair market value is used to determine the Gross Estate of ones property. After calculating the Gross Estate, accountants may make applicable
deductions such as reductions in value, mortgage, debts, property that transfers
Table of Basic Exclusion Amounts
PeriodBasic Exclusion AmountCredit Equivalent in 2013 rates
2000 and 2001$675,000$220,550
2002 through 2010$1,000,000$345,800
2011$5,000,000$1,945,800
2012$5,120,000$1,993,800
2013$5,250,000$2,045,800
2014$5,340,000–
Fig 2. Source: IRS.gov Instructions for Form 706 to children and spouses, and estate administration expenses in order to arrive at

Does The Language Contained Be A Qualified Domestic Trust?
I.QUESTION PRESENTED
Does the language contained in Form M allow the trust it creates to qualify under I.R.C. В§ 2056A as a qualified domestic trust treatment?
II.SHORT ANSWER
Form M does not provide all of the required language needed to allow a trust to qualify for domestic trust treatment. It is missing two important
portions of language needed to allow it to fulfill the qualification requirements contained in section 2056A and its accompanying regulations. First, it
does not designate that the laws of a particular state will govern administration or be the location of record keeping. Secondly, the terms of the trust do
not otherwise meet the requirements for the marital deduction under section 2056. Simple changes can be made to the ... Show more content on
Helpwriting.net ...
I.R.C. В§ 2056(d)(1). Congress has provided an exception to this general rule in the form of a qualified domestic trust (QDOT), which allows the
property to qualify for the marital deduction if the trust meets certain requirements. I.R.C. В§ 2056(d)(2)(A). For a trust to qualify for QDOT status and
the marital deduction, it must meet the seven requirements contained in the tax code and accompanying treasury regulations. I will separately discuss
each requirement below and whether the currently language of Form M effectively fulfills that requirement.
B.Designation of U.S State for Administration and Record Keeping
The instrument creating the trust must designate that the laws of a U.S. state or the District of Columbia will govern the administration of the trust
and that the trust must be maintained under this jurisdiction's laws. The trust records, or copies of these records, must be kept in the same state which
is designated for the administration of the trust. Treas. Reg. В§ 20.2056A–2(a). The language of Form M does not specify or mention any state for the
location for administration of the trust or as a location for record keeping. To qualify under this requirement, the document should include the following
language or something similar: "This trust shall at all times be governed, construed and administered in accordance with the laws of the
[Commonwealth of Virginia or other State]."
C.Trust Must Qualify as "Ordinary Trust"
The instrument must create a trust

Use Of The Following Information Of The Thought Process Is...
Use the following information to answer the questions posed. Please show or explain your work to the extent possible. If you miss a question but
have correct reasoning, I will be able to give you partial credit. If you just list a final answer, I will not be able to give any credit if you have answered
incorrectly. Demonstration of the thought process is key to achieving full credit! Because this is a take–home style project not constrained by a time
limit, I expect your submission to be a finished work that is carefully edited and formatted for ease of reading. Typographical and grammar errors will
count against you in the computation of your grade. Show me your best work.
Harrison and Winona Background
Harrison (age 48) and Winona (age 46) have been married for 24 years and live in a community property state. Winona is a 10–year breast cancer
survivor, and Harrison has recently been diagnosed with prostate cancer. His prognosis is very poor as his cancer had spread to his bones prior to
detection. Doctors have informed Harrison and Winona that survival beyond 24 months is unlikely. Winona is currently in good health. Winona has
one daughter, Olivia (age 26), from a previous marriage. Olivia lives in a duplex on property owned by her mother and stepfather with her husband
and two small children, ages 3 and 1. Together, Harrison and Winona have the following children and grandchildren:
CHILDRENAGESGRANDCHILDREN
Twain222 children
Trey191 child
Felicity13

Avoid Real Estate Investment Tax
Minimization of Individual Tax Liability in Real Estate Investment
In the world of investing, in general, one question is often the most challenging to answer. How does an investor grow their nest egg without losing
the majority of their gain to the IRS as income tax? This question is even more challenging in the area of real estate where one's tax liability is
drastically increased by just the sale of one property. This simple transaction can increasing the investor's ordinary income if the property is a short
term investment (investment is less than 1 year) or increasing their capital gains for long term investments (over 1 year). Surprisingly, there are several
easy ways to drastically reduce tax liabilities with some planning and ... Show more content on Helpwriting.net ...
In this case the custodian withdraws its fiduciary responsibility and allows you to choose the investments that you think are appropriate, such as
investment property. (Casey 2013, 168)
At first glance the self–directed IRA can seem like the perfect way to leave the stressful world of the stock market but the seemly endless rules can
quickly change an invertors mind. Furthermore if an investor knowingly or unknowingly breaks one of the many rules they could be audited by the
IRS and if caught the entire IRA becomes immediately taxable as ordinary income. The most important rule is that the investor must keep his personal
funds separate from their IRA funds. Most professionals agree it is important to consult an attorney and a CPA to facilitate the creation of a
self–directed IRA. For the investors who fell the risk of an IRS audit is too great and are looking for more protection of their other assets, if they find
themselves involved in a lawsuit, the formation of a Limited Liability Company (LLC) might be a better option. The existence of LLC's didn't occur
until 1977 as author John Balouziyeh explains here:
Corporations and partnerships have traditionally served as the forms of organization from which business owners could choose. Recently, state statutes
have begun to recognize a new form of business organization, the limited liability company (LLC). First recognized by state statute in 1977, the LLC
is a hybrid

The Federal Estate Tax Should Be Abolished
Over the past few months, the federal estate tax has been a popular topic in the news. Also known as the death tax, this tax is applied to the transfer
of an estate at passing away of an individual. Generally, said estate includes all assets of the person who passed away, including financial assets like
stocks, bonds, and mutual funds; real assets, like houses, land, or other tangible property; and proceeds from life insurance policies. The United States
federal government established the estate tax that is currently implemented in 1916. Since then, the estate tax was phased out in 2001, so that the rates
dropped until eliminated in 2010. However, this legislation was not lasting, and the estate tax returned in 2011.
The estate tax that ... Show more content on Helpwriting.net ...
This tax is only creating more pain at a time when our country should be supporting its citizens who provide jobs and help boost the economy.
Since the inception of our great country, American families have worked hard their whole lives to make the money to support their families and pass a
legacy down to their future generations. This hard work is built into the framework of our country. We say that we encourage the citizens to be
self–made and work hard because both these actions will pay off. How can we truly be promoting success if our tax code is working directly against
our hard–working citizens? In fact, the estate tax is actually a double tax: "income taxes must be paid on earnings that eventually make up the estate's
value" (Wood). In 2015, the Supreme Court ruled that the double taxation that the state of Maryland was imposing on its citizens was unconstitutional
(Brown). Our government needs to be taking the proper steps to eradicate all forms of double taxation, as it is certainly not fair to the people, the
people for whom the Constitution was created to protect.
Another key fact that must be pointed out is the amount of revenue, or lack thereof, that this estate tax makes for the federal government. In 2014
alone, our federal government made over $3 trillion. Of that massive number, the estate tax counted for $19.3 billion, or a mere 0.6

Taxes in the News
Experiential Component – Taxes in the News
On Tuesday, November 6, 2012 one of the most crucial presidential elections will take place in our history. The candidates for this upcoming election
are as follows: democrat party, current President Barack Obama (president) and Joe Biden (vice); republican party, Mitt Romney (president) and Paul
Ryan (vice president); independent/ 3rd party candidates are Virgil Goode, Gary Johnson, and Jill Stein. As the final hours of the most anticipated
election approaches, it is important that one is knowledgeable regarding both parties and their intentions for America, if elected for president.
Each presidential candidate and their values regarding our country and how to achieve overall forward ... Show more content on Helpwriting.net ...
The purpose of the Buffet Rule is to tax those individuals who fall under a higher income bracket accordingly, anyone making less than the $1
million per year will be taxed less. Under the existing law, everyone is taxed the same regardless of income levels. (Becker) During the campaign,
Obama has also agreed to temporarily extend the "extender" provision tax. The extender provisions are credits and tax breaks given to corporations
that primarily focus on research and development. Obama has suggested making the credit permanent and increasing the credit rate from 14% to 17%.
The current status of the tax provision for extenders has expired. A larger tax break for research and development will give companies an incentive to
continue looking for new ways to advance. ("Tax policy outlook for the presidential election") In the most recent years, our economy has plummeted
and there have been several suggestions on how to regain economic stability. Unfortunately, the tax incentives that are intended on boosting our
economy have not aided our current financial crisis. Economists have not been able to agree on incentives that would further support the recovery of
our nation; therefore, not much has been done to correct our current financial deficit. During his time in office, Obama has ratified several tax
incentives that have helped regain some of our financial stability. The "making work pay" tax credit, employer incentives for hiring unemployed

A Lifetime Accessions Tax : An Alternative For The Estate...
A Lifetime Accessions Tax: An alternative to the Estate Tax 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. In place for over one–hundred years now, the estate tax was put into place to do more than just
finance World War I. In 1916, there were extremely wealthy families, such as the Vanderbilt's and the Carnegie's, that dominated industries and held a
large portion of the nation's wealth. The estate tax was proposed to curb massive amounts of inter–generational wealth that was

The Issue Of Taxation And The Middle Class
Few Americans believe that their taxes are too low, especially when the amounts they pay in addition to federal and state income taxes are included.
For example, individuals as well as their employers remit payroll taxes. There are federal taxes on gasoline, cell phone bills, hotel rooms, airline
tickets and a bevy of other goods and services. Sales taxes and property taxes place an additional burden on consumers. Furthermore, there are
numerous fees that are little more than thinly disguised taxes, such as disposal fees, tolls and building permits. Although the issue of taxation can be
unpopular with voters, Hillary Clinton has repeatedly vowed to increase taxes and will likely keep her promise. However, the question remains as to
for whom she plans to raise taxes.
Clinton Admits Plan to Increase Income Taxes for Middle Class
At a campaign appearance in August 2016, Clinton exclaimed that "we are going to raise taxes on the middle class." According to DailyWire.com,
Clinton was in the middle of a speech about the need for a fairer tax code for the middle class when she blurted out the statement regarding raising
taxes on this group. Her words have triggered debates over whether she misspoke, intending to state that she would raise taxes on the rich or cut taxes
for the middle class.
Some people believe that Clinton meant exactly what she said, despite a promise she made in November 2015 that her tax plan would not increase
taxes for families that earned less than

Comparative Analysis Of The Estate Tax Essay
Comparative Analysis of the Estate Tax
First and Last Name
Class Number
Teacher's Name
Date
While the Presidential election of 2016 has been non–traditional in many ways, one issue that has retained its conventional place in American politics is
the debate over the estate tax. According to Merriam–Webster Dictionary (2016) the estate tax, labeled the "death tax" by its opponents, is a tax that a
person must pay on an estate (money or property) that he or she inherits. Given the circumstances surrounding the estate tax, usually owed after a
family member or close relative has passed way, there can be emotional resentment in regard to its existence and structure. The estate tax also
represents a philosophical divide within American political thought. While the effect of the estate tax is confined to only a few thousand wealthy
families (Hanlon & Steinberg, 2013), it strikes at the core of the contemporary debate over the role of government in American life and what the scope
of American's tax system should be. Two prominent political think–tanks, The Heritage Foundation and Center for American Progress, have published
papers on this issue using argumentation, evidence, and data. Scrutinizing and analyzing these two different arguments on the subject of the estate tax
illuminates the current ideological divide within the United States.
Center for American Progress is a liberal think tank that does research and analysis on a variety of salient domestic and

Who Is Andrew Mellon?
Andrew Mellon's plan contained his four main points of what he thought the government should do in order to better the economy. First, he said that it
was necessary to cut the top income tax rate to 25 percent. This was done in order to produce more revenue for the government. Melon believed that
high–earning investors would pay no more than this percentage before they locked their money into tax–exempting bonds. Mellon's tax cuts, which cut
the top income tax to 24 percent, brought the income revenue to over a billion dollars in 1929. The increased revenue proved that these tax cuts were
successful.
Second, he wanted to cut taxes on low incomes. Mellon wanted to cut the tax percentage for those earning low incomes by about 25 percent. He
wanted the taxes to be mostly paid by those who had the money to spare. Along with this, he wanted to revoke the tax on telegrams, telephones, and
movie tickets. He expected this to lose some revenue for the government but save money for the people. Taxes being ... Show more content on
Helpwriting.net ...
This would occur the heirs would want to sell their inherited land quickly to avoid the high taxes. These high estate taxes also caused more wealthy
land–owners to move their money into tax–exempt bonds. Mellon expected lowering the taxes to reduce occurrences of this. In 1928 and 1929, Mellon
halved the estate tax to 20 percent. This attributed to a rise in the economy.
Finally, he wanted efficiency in the government. Mellon wanted to have the annual federal budget drop from $18 billion to below $4 billion, for this
would allow them to pay back their debt have tax revenue more unessential. He worked to cut personal expenses from the Treasury Department,
cutting about one person per day during the 1920s. The lowering of the government's budget allowed lower tax rates and fewer returns, which also
allowed them to lay off unnecessary

Explain Ways To Minimise Estate Tax
Ways to minimise Estate Tax 1) Generation skipping: Generation skipping is exactly as it sounds. In countries that allow it, many people will often
choose to transfer a portion of their estate assets to their grandchildren rather than transferring the full estate directly to their immediate children. This
strategy skips the second generation, and transfers the assets straight to the third generation, which saves the assets from being eventually taxed twice.
Normally the assets would be taxed once when transferred from you to your children (second generation) and again when your children transfer it
eventually to your grandchildren (third generation). 2) Valuation Discounts : Valuation discounts can be an area where you can find significant

Estate Plan Essay
Introduction
The purpose of this memo is to devise a practical estate plan for our client who has maintained a lucrative sole proprietorship conducting business in
commercial real estate. The goal in our tax planning strategies will be to legally transition the $1 billion in assets to a family limited partnership (FLP).
Additionally, the client would like to begin transferring proportional ownership of ninety percent of the company to his two children over the next
thirty years and sell ten percent of the company to an unrelated third party. Furthermore, this task needs to minimize the client's taxable estate
substantially to reduce his estate tax liability at his death. Moreover, the most proactive method after the FLP is formed, is to ... Show more content on
Helpwriting.net ...
However, there are multiple complexities of the IDGT that must be considered to accurately maintain separation of the assets or a bona fide sale to the
IDGT per Rev. Rul. 85–13, 1985 CB 184 which requires" any notes concerning assets must be considered as arms–length transactions to be disregarded
as a gift and the IDGT must be set up to withstand time–related concerns such as taxation to avoid depletion of assets in the trust." Moreover, all assets
must be properly valued at their present fair market value (FMV) when being transferred to the trust or a buy–sell agreement is chosen for the assets. A
largely contested area of trusts is related to how the "value of an asset was determined and the utilization of past tax decisions on valuation to avoid
additional taxation on undervalued" assets such as was noted in the Estate of George C. Blount (Zaritsky, 2006).
Additionally, trusts can gift assets that are valued at the yearly exclusion amount with no tax ramifications. IRC 2503 (b) defines the "annual gift
exclusion that may be

Notes On Redeeming Savings Bonds Essay
When redeeming savings bonds that are property of the estate, reporting rules from the IRS can make the transaction complex. As depicted in the
article Redeeming Series E Savings Bonds of the Decedent, redeeming savings bonds is not a difficult process. However, reporting the interest income
earned on the savings bonds is where the complexities exist. As a result, implications may result for the estate if the executor is not aware of the rules
the IRS set forth for reporting interest income on the savings bonds.
Note: Savings bonds in this article refer to series E, series EE, and series I savings bonds. Reporting rules from the IRS are similar to these three series
of savings bonds. Basic Facts about the Series E Savings Bonds
To properly explore the implications of redeeming savings bonds, an overview of some basic rules is necessary. Here are some basic rules for savings
bonds provided by the website Treasury Direct:
Redeeming savings bonds can only occur after the bonds are 12 months old.
All series E and series EE savings bonds that stop earning interest at maturity should be redeemed.
If the savings bonds are series EE savings bonds and redeemed before the bonds were 5 years old, you will lose the last three months of interest.
Savings bonds are fully taxable at the federal level, but tax–exempt at the state and local level.
Interest income from savings bonds are subject to federal estate, gift, and excise taxes as well as any state estate or

Housing Planning And Estate Planning

Recommended

Recommended

More Related Content

More from Angel Ashford

More from Angel Ashford (20)

Recently uploaded

Recently uploaded (20)

Housing Planning And Estate Planning