Commonly and collectively, they are referred to as death taxes
. This is a tax that is imposed on the gratuitous transfer of property to any person, usually the heirs, after a person dies.
State income taxes and state death taxes
could deplete the IRA even further.
Post death taxes
Your estate may be taxed in both jurisdictions, although again a double taxation treaty may assist.
That made 80% of the estate subject to death taxes
of about 55%, and the bill is due in nine months," Zabel (http://www.nydailynews.com/entertainment/james-gandolfini-tax-disaster-top-estate-lawyer-article-1.1391181) told New York Daily News.
Generally, states that "de-coupled" from the federal estate tax system so they could continue to levy death taxes
on their deceased residents have progressive state death taxes
ranging from about 5 percent up to 16 percent, depending on the size of the taxable estate.
The Video: How to Jump-Start a Tax-Free Retirement Plan also discusses a tax trap rescue plan for existing IRAs, 401(k)s and 403(b) retirement plans that are crushed with income taxes and Obama's death taxes
Therefore, the IRC does not permit an estate of a decedent to claim a credit for state death taxes
paid for the period January 1, 2005, through December 31, 2012.
Yet, such levies also hurt small-business owners and their ability to create and sustain jobs; those that inherit, not infrequently, find themselves obliged to liquidate their assets in order to pay death taxes
Why then should the government demand that many of these families pay Death Taxes
at confiscatory rates for assets that were already taxed when they were earned?
CSTs can provide three benefits: (1) elimination of federal death taxes
on the first death; (2) elimination of death taxes
on CST assets (including any appreciation) upon the second death; and (3) implementing specific instructions on the distribution of trust principal and income to the surviving spouse, children, and grandchildren.
Can we have assurances from all our MPs that, if re-elected, they will oppose any plans which include such draconian death taxes
on all elderly adults who have worked and paid taxes throughout their working life?
Regardless of what happens on the federal level, clients also need to think about the impact of state death taxes
on their estate plans.