Estimating the value of an estate
old...@old.net
We are trying to plan ahead as my wife is terminal with cancer.
When trying to estimate the value of an estate for tax purposes and
splitting between the Living Trust and the Residual Trust does one
consider the value of the deceased IRA and the Survivors IRA? If
considered where does each IRA fall?
Next in 2010 the basis of the security holdings does not get reset.
Does one then use the average basis? What does one do for the
"acquisition dates" when purchases were made over several decades?
Thanks,
oldman
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Stuart A. Bronstein
> Questions:
>
> We are trying to plan ahead as my wife is terminal with cancer.
>
> When trying to estimate the value of an estate for tax purposes
> and splitting between the Living Trust and the Residual Trust
> does one consider the value of the deceased IRA and the Survivors
> IRA? If considered where does each IRA fall?
If you're talking about estate tax purposes, IRA's are inncluded in
the taxable estate. In addition life insurance on the deceased is
also included if he has any "incidents or ownership," which he
probablly has.
> Next in 2010 the basis of the security holdings does not get
> reset. Does one then use the average basis?
It doesn't get re-set because there's no estate tax to counter-
balance the loss of income tax. I'm not sure but I'd guess it
would be the donor's basis. I have no idea what you mean by
"average basis."
> What does one do for the "acquisition dates" when purchases were
> made over several decades?
Do you mean you pay for a particular asset over a term of years?
Or you buy different things over the years?
If you buy different things, each one has its own acquisition date
- when it was acquired.
If you mean something like a house that you pay for over many
years, the acquisition date is when you first acquire it - that's
what acquisition means - When you contract to buy it.
--
Stu
http://downtoearthlawyer.com
D. Stussy
news:Xns9CBC914DFFBF5s...@130.133.1.4...
> old...@old.net wrote:
> > Questions:
> >
> > We are trying to plan ahead as my wife is terminal with cancer.
> >
> > When trying to estimate the value of an estate for tax purposes
> > and splitting between the Living Trust and the Residual Trust
> > does one consider the value of the deceased IRA and the Survivors
> > IRA? If considered where does each IRA fall?
>
> If you're talking about estate tax purposes, IRA's are inncluded in
> the taxable estate. In addition life insurance on the deceased is
> also included if he has any "incidents or ownership," which he
> probablly has.
>
> > Next in 2010 the basis of the security holdings does not get
> > reset. Does one then use the average basis?
>
> It doesn't get re-set because there's no estate tax to counter-
> balance the loss of income tax. I'm not sure but I'd guess it
> would be the donor's basis. I have no idea what you mean by
> "average basis."
Decedent's basis + any transfer tax (which is ZERO for estate tax in 2010)
actually paid.
A transfer tax could also be the gift tax on Form 709. The gift tax hasn't
gone away.
There is no such thing as "average basis."
> > What does one do for the "acquisition dates" when purchases were
> > made over several decades?
>
> Do you mean you pay for a particular asset over a term of years?
> Or you buy different things over the years?
>
> If you buy different things, each one has its own acquisition date
> - when it was acquired.
>
> If you mean something like a house that you pay for over many
> years, the acquisition date is when you first acquire it - that's
> what acquisition means - When you contract to buy it.
For items actually inherited, there is no acquisition date needed. Write
"Inherited" instead. All capital transactions are long-term regardless of
the successor's holding period.
Stuart A. Bronstein
> For items actually inherited, there is no acquisition date
> needed. Write "Inherited" instead. All capital transactions
> are long-term regardless of the successor's holding period.
What about for purposes of depreciation - if there's no acquisition
date, how do you calculate that?
--
Stu
http://downtoearthlawyer.com
Arthur Kamlet
Stuart A. Bronstein <spam...@lexregia.com> wrote:
>"D. Stussy" <spam+ne...@bde-arc.ampr.org> wrote:
>
>> For items actually inherited, there is no acquisition date
>> needed. Write "Inherited" instead. All capital transactions
>> are long-term regardless of the successor's holding period.
>
>What about for purposes of depreciation - if there's no acquisition
>date, how do you calculate that?
Inherited property does not carry any prior depreciation. If rental
property is inherited, reset the clock and any depreciation expense
on date of death.
--
ArtKamlet at a o l dot c o m Columbus OH K2PZH
D. Stussy
> "D. Stussy" <spam+ne...@bde-arc.ampr.org> wrote:
> > For items actually inherited, there is no acquisition date
> > needed. Write "Inherited" instead. All capital transactions
> > are long-term regardless of the successor's holding period.
>
> What about for purposes of depreciation - if there's no acquisition
> date, how do you calculate that?
According to the date the successor places it in service.