The Realized Team’s Picks
What States Have Both Inheritance and Estate Tax?
Estate planning is essential to protect the value of your estate and create the lowest possible amount of taxation when assets are transferred to your heirs. Estate planning is especially important for larger estates. The IRS estate tax exemption of $12.06 million excludes many estates from federal taxation, and that exclusion amount is doubled for married couples. However, some states impose estate taxes while others impose inheritance taxes – and one state imposes both.
What Is An Intentionally Defective Grantor Trust (IDGT)?
Intentionally Defective Grantor Trusts (IDGT) are when a grantor transfers an asset, or assets, into a trust where the asset and any growth are effectively removed from the estate, but the grantor still pays income tax. Effectively, the grantor’s purpose is to potentially grow the inheritance “income tax-free” for their heirs by paying the income taxes as the asset grows while they are still alive. By setting up an IDGT the grantor is “intentionally” triggering the need to pay income tax on the asset.
Where Do I Put Royalties On My Tax Return?
Taxes are a regular part of generating income. No matter how you earn money, there’s a tax for that. Taxes on ordinary income or capital gains are fairly straightforward. But taxes you might owe on royalties are a little more complex. This is because royalties encompass a broad list of payment types and income. In other words, where to report your royalties when tax time rolls around greatly depends on the type of royalties you earn.
How Does Divorce Affect Capital Gains Tax?
Going through a divorce can be an emotionally difficult time as lives are uprooted during separation. Divorce also can bring about some serious tax consequences, especially for couples who sell their primary marital residence and file separate tax returns. High-net-worth couples who own commercial real estate properties also face some complicated financial decisions.
What Does Per Stirpes Mean For Beneficiaries In A Will?
When you are creating your estate plan, it is important to look beyond your primary beneficiaries and consider what happens to their inheritance if they precede you in death. If you add a per stirpes distribution to your will, the beneficiary's share of your assets will pass to their direct descendants if they die before you.
Does Deferred Income Count as Earned Income?
A deferred income plan isn’t just another name for a retirement plan. There are two types of deferred income plans — qualified and non-qualified. Is it considered earned income when you contribute to one of these plans? Does it matter? We’ll discuss the differences in these plans and cover if their income is considered earned.
Are REITs a Good Investment During Inflation?
Some people consider direct real estate investments to be an inflation hedge. But direct real estate investing and REIT (real estate investment trust) investing are two very different worlds. Are REITs also considered an inflation hedge? That’s what we’ll explore in this article.
What is a Cap Rate in Real Estate?
Since real estate investors don’t have crystal balls they can consult when considering which properties merit their investment capital, they turn to cap rates instead.
What Is An A-B Trust?
Individuals sometimes use an A-B trust, or bypass trust, in their last will and testament or living trust for potential estate tax benefits. It is generally only used by couples whose estate is over the estate tax filing threshold, which in 2022 was $12.06 million.
Can You Choose an Escrow Company as Your Qualified Intermediary?
Successfully completing a 1031 exchange requires meticulous attention to detail. Exchangors don’t have to worry about navigating every single detail of their exchanges, however – that job falls on the Qualified Intermediary.
