2001(a), the estate tax is imposed on the transfer of the taxable estate
of every decedent who is either a citizen or a resident of the United States.
24) If the election is being made to treat a distribution right as a QPR, the statement must provide a schedule of the expected amounts and dates of payments (25) and must include a signed declaration whereby the individual making the election agrees that his or her taxable gifts or taxable estate
will be increased (as discussed below) if the payments are not made as provided in the schedule, and that he or she will be personally liable for the resulting increase in tax liability.
If what you will leave behind in terms of net taxable estate
is P200,000 or less, then your estate will be exempt from estate taxes.
Vera can do the same, moving a total of $56,000 from their taxable estate
But suppose G2 does not have a taxable estate
large enough to use his applicable exclusion amount and GST tax exemption (both of which are indexed for inflation going forward and will be $5,450,000 in 2016).
These assets are not included in father's taxable estate
, but as a result do not benefit from a second step-up in cost basis at his death.
Under current law, the estate tax takes a 40% cut from a taxable estate
when a person passes away.
When Jane dies several years later, having fully utilized her exemption for lifetime gifting, the S4 million taxable estate
she leaves to her daughter Kim (Sally's grandchild) at her death is also subject to estate tax--thereby subjecting the $4 million to estate tax twice, once at each generation below Sally.
Once a taxable estate
exceeds 105% of the basic threshold amount, the [exemption will be totally unavailable to the decedent.
In addition, the death of general partner results in the reduction of your taxable estate
because it will include only the value of your general partnership interest, not the value of the FLP's underlying assets.
For example, it could provide liquidity for a taxable estate
, provide for the continuing needs of a surviving spouse or leave a financial legacy for children and grandchildren.
However, the gift reduces the taxable estate
of the giver.