6 Deductions 2053, 2054, 2055, 2056 Students 2009

6 Deductions 2053, 2054, 2055, 2056 Students 2009 - CHAPTER...

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CHAPTER 6 Deductions from the Gross Estate Funeral and Administrative Debts, Claims, Taxes Charitable Deduction Marital Deduction
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Estate Tax Formula Deductions -Funeral expenses -Administrative expenses -Debts -Losses -State death taxes Net wealth -Charitable deduction -Marital deduction Taxable estate + Post 1976 taxable gifts ( adjusted taxable gifts ) Total taxable transfers x Rate Tax on total taxable transfers -Gift taxes computed on post 1976 gifts -Unified credit -Other credits Estate Tax liability Gross estate
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Deductions from the Gross Estate §2053: Expenses, indebtedness, and taxes §2054: Losses §2055: Charitable bequests §2056: Marital deduction §2058: State death taxes
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Funeral Expenses One hundred dollars shall be expended by my executors for the purpose of buying booze and canapes for my friends. On second thought make it three hundred dollars because I don’t want my friends to go away sober or serious. --from the will of Wayne Morris * Bove and Bove Jr., The Complete Book of Wills, Estates and Trusts
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§ 2053 Expenses, Indebtedness and Taxes Deductions allowed for Funeral expenses Administrative expenses Claims against the estate Unpaid mortgage(s) on or other debt on property included in the gross estate
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§ 2053 Expenses, Indebtedness and Taxes Key requirements § 2053(a) Must be allowable under laws of jurisdiction where estate is being probated Limited to amount of assets subject to claims § 2053(b) If property is not subject to claims, deduction still allowed if Property is included in the gross estate and Had the property been subject to claims such expenses would have been deductible Stakeholders: Beneficiaries, creditors
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§ 2053 Expenses, Indebtedness and Taxes Stakeholders: Beneficiaries, creditors Order of payment Funeral expenses Administrative expenses Taxes (federal and state) Expenses of last illness All other debts Beneficiaries Concern for what can be paid out of the assets subject to claims
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Roosevelt's Funeral Procession on Pennsylvania Avenue FUNERAL EXPENSES
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Helmsley Mausoleum
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Funeral Expenses State law Funeral expenses must be reasonable in proportion to the entire estate Are they excessive? Typical expenses Funeral service Clergy Mortuary Hearse, limousines Casket Cremation Pianist, singers Flowers, etc. Tombstone, monument, or mausoleum Burial lot for decedent or his family. Also costs for future care of lot What about an open bar at the wake? 1
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Funeral Expenses Transportation costs of the person bringing the body to the burial site are deductible as funeral expenses (e.g., a corpse is flown home) NOT traveling expenses for beneficiaries or others to attend the decedent’s funeral
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Administrative Expenses Executor or administrator fee Attorney and accountant fees Court costs Appraisal fees Lawyer’s Club 6
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This note was uploaded on 06/23/2009 for the course BUPA 516 taught by Professor Kulsrud during the Spring '09 term at IUPUI.

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6 Deductions 2053, 2054, 2055, 2056 Students 2009 - CHAPTER...

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