TAX 6405 Unified Overview(1) - Chapter 14 Transfer Taxes and Wealth Planning Chapter 14 Transfer Taxes and Wealth

TAX 6405 Unified Overview(1) - Chapter 14 Transfer Taxes...

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1 Estate, Gift and Generation-Skipping Transfer Taxes Overview TAX 6405
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Class Schedule Unified Credit Transfer Tax Overview Overview of Estate Tax Overview of Gift Tax Overview of Generation Skipping Transfer Tax (“GSTT”) 2
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3 Estate and Gift Taxation in General
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4 Overview of Transfer Taxes All gratuitous transfers are (currently) subject to a unified transfer tax (since 1976) including: the estate tax (has been in existence since 1916) the gift tax (has been in existence since 1932) the generation-skipping transfer tax (GSTT) (has been in existence since 1976) Note: Transfer taxes have a limited impact – have produced about 1% of total revenue & affected around 1% of individuals. Gift tax tax on inter vivos (lifetime) transfers for less than full and adequate consideration payable by the donor Estate tax tax on testamentary (at death) transfers imposed on decedent’s estate determined under tax rules (this is NOT synonymous with the probate estate). tax on the right to pass property at death (this is a TRANSACTION tax, not a property tax) essentially, the individual’s final taxable gift Generation Skipping Transfer Tax : Included in both Gift and Estate Tax.
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5 Overview of Transfer Taxes, cont’d
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6 Gift Taxes
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7 Gift Taxes Formula Formula For Gift & Estate Taxes: The 2009 Gift Tax Credit is $345,800 ($1 million of taxable gifts) The 2009 Estate Tax Credit is $1,455,800 ($3.5 million taxable estate) Gift tax Estate tax Total gifts to which the gift tax might apply (at fair value) – Education and medical exclusion – Political Gifts – Charitable deduction – Marital deduction – Annual exclusion(s) ($12,000 per donee) = Taxable gifts for the current period + All taxable gifts made in prior periods = Total taxable gifts to date
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