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Potential Estate Tax Details
12-11-2010, 10:06 AM
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#1
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Thinks s/he gets paid by the post
Join Date: Oct 2003
Posts: 1,319
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Potential Estate Tax Details
Some interesting reading on the Senate's version of the estate tax deal:
The 'Death Tax' Is Reborn - WSJ.com
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We are, as I have said, one equation short. – Keynes
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12-12-2010, 05:07 PM
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#2
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Recycles dryer sheets
Join Date: Nov 2010
Location: Henderson
Posts: 87
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Inflation Indexing
Here's the element I was looking for: "Inflation indexing. The $5 million exemption would be indexed for inflation beginning in 2012, which suggests the drafters foresee an extension." Sounds good to me. Depending on inflation, investment results, and my longevity and spending habits, I could bust the five million limit sooner or later.
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12-13-2010, 07:56 PM
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#3
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Full time employment: Posting here.
Join Date: Nov 2009
Location: VA
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While I don't agree with the estate tax in general, the fact remains that if they take in less revenue from the estate tax, they will need to impose higher taxes while people are alive one way or another. We already know that the likelihood of the government reducing spending is slim to none at this point, especially with healthcare reform subsidies going into effect in 2014.
This proposal also doesn't help people planning for estate taxes because it sunsets in 2012. As the national debt increases, is it more likely that they will keep the $5M exemption or reduce it to a lower level to take in more taxes? Heirs shouldn't count their chickens before they are hatched, and I think a lot of estate planning attorneys are going to still recommend people plan for lower exemption levels than $5M.
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Disclaimer - I am an independent insurance agent. If the above message contains insurance-related content, it is NOT intended as advice, and may not be accurate, applicable or sufficient depending on specific circumstances. Don't rely on it for any purpose. I do encourage you to consult an independent agent for insurance-related advice if you have a question that is specific in nature.
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12-13-2010, 08:02 PM
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#4
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Thinks s/he gets paid by the post
Join Date: Oct 2004
Location: LaLa Land
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Not a problem I have to deal with. (heh)
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12-14-2010, 07:34 AM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Quote:
Originally Posted by dgoldenz
I think a lot of estate planning attorneys are going to still recommend people plan for lower exemption levels than $5M.
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I think estate planning attorneys will always recommend people make plans involving work by estate planning attorneys at high prices to try to skirt laws other attorneys in Congress pass. That how our system works.
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"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
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12-14-2010, 08:19 AM
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#6
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Thinks s/he gets paid by the post
Join Date: Oct 2006
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One important "detail" is that the $5 million exemption is per individual, so it's $10 per couple, if handled correctly. The "portability" section in this bill supposedly makes it easier for a couple to use the full $10 million.
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12-14-2010, 11:17 AM
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#7
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Thinks s/he gets paid by the post
Join Date: Oct 2003
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Quote:
Originally Posted by Independent
One important "detail" is that the $5 million exemption is per individual, so it's $10 per couple, if handled correctly. The "portability" section in this bill supposedly makes it easier for a couple to use the full $10 million.
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Lessens the need for an AB trust to avoid losing part of the credit when the spouse is to be the heir. Truly "unifying" the credit is a nice touch as well.
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We are, as I have said, one equation short. – Keynes
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12-15-2010, 09:45 AM
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#8
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Full time employment: Posting here.
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Quote:
Originally Posted by ronin
Lessens the need for an AB trust to avoid losing part of the credit when the spouse is to be the heir. Truly "unifying" the credit is a nice touch as well.
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It also allows someone to give away a substantial amount of real estate while they're still living at present values instead of upon death at likely higher future values. Still, I'd be surprised to continue seeing the exemption level at $5M+ per person for the long term.
__________________
Disclaimer - I am an independent insurance agent. If the above message contains insurance-related content, it is NOT intended as advice, and may not be accurate, applicable or sufficient depending on specific circumstances. Don't rely on it for any purpose. I do encourage you to consult an independent agent for insurance-related advice if you have a question that is specific in nature.
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12-15-2010, 09:49 AM
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#9
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Thinks s/he gets paid by the post
Join Date: Oct 2003
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It seems like for tax planning purposes, 2 yrs. is the long term these days.
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We are, as I have said, one equation short. – Keynes
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12-15-2010, 09:55 AM
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#10
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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From the article:
Quote:
The Senate's bill makes this regime effective only for 2011 and 2012. At that point the provisions "sunset," and if Congress doesn't act, the 2013 top rate would again be 55% and the exemption $1 million per individual. So that may mean more estate-tax drama two years from now.
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Enough temporary laws that sunset already! Fix it ONCE and leave it alone. Doesn't matter whether it's income tax rates, the estate tax or the AMT. I think uncertainty about future tax policy is preventing a lot of productive investing whether it's individuals or businesses -- with bad results for both the economy and the Treasury.
When no one feels confident about long-term commitments of capital because of how changes in tax policy might affect it in the future, you know there's a problem.
Fix it ONCE. Get it right. Make it permanent and stop these "kick the can" games where we have another "crisis" in a couple years. Frankly I think all the tug of war over income tax rates is more damaging to the economy than setting it once and leaving it alone for a long, long time.
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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12-15-2010, 09:57 AM
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#11
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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I think it's important that the rules change regularly. If they don't, attorneys, CPA's and other professionals involved in estate planning might not have zillions of clients running in for help in responding to the latest changes.
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"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
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12-15-2010, 10:02 AM
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#12
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
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12-15-2010, 10:04 AM
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#13
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Oct 2005
Location: North Oregon Coast
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Quote:
Originally Posted by youbet
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Yeah, I know. But it's really frustrating that these clowns can't seem to understand how much economic damage the constant uncertainty about future tax policy is causing. Unless, of course, they receive campaign contributions from CPAs and tax lawyers, in which case they understand but don't care...
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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12-15-2010, 10:39 AM
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#14
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Full time employment: Posting here.
Join Date: Nov 2009
Location: VA
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Quote:
Originally Posted by ziggy29
Yeah, I know. But it's really frustrating that these clowns can't seem to understand how much economic damage the constant uncertainty about future tax policy is causing. Unless, of course, they receive campaign contributions from CPAs and tax lawyers, in which case they understand but don't care...
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There's that cause and effect relationship again...
__________________
Disclaimer - I am an independent insurance agent. If the above message contains insurance-related content, it is NOT intended as advice, and may not be accurate, applicable or sufficient depending on specific circumstances. Don't rely on it for any purpose. I do encourage you to consult an independent agent for insurance-related advice if you have a question that is specific in nature.
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12-15-2010, 03:42 PM
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#15
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Quote:
Originally Posted by ziggy29
Yeah, I know. But it's really frustrating that these clowns can't seem to understand how much economic damage the constant uncertainty about future tax policy is causing. Unless, of course, they receive campaign contributions from CPAs and tax lawyers, in which case they understand but don't care...
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Ziggy stop being a Grinch. Didn't you know that we have almost 10% unemployment? If we didn't have Congress constantly fiddling with tax code, we'd have lots of unemployed CPA, and lawyers, and don't forget lobbyist.
Taking the side of Congress since 1901
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