| d="body"> | | | | bad news is you'll possibly have to pay capital gains |
| I think by now most of you have heard that there's no | | | | tax. I say possibly because there are some |
| inheritance tax or estate tax this year. So if you're | | | | exemptions or limits - the first $1,300,000 of assets are |
| planning on passing away anytime soon, this would be | | | | not subject to this capital gains tax, but anything above |
| a good year to do it - at least from an estate planning | | | | that is. There also is a provision for people who are |
| point of view. I'm kidding, of course. But in case you | | | | inheriting a small business, and also for surviving |
| decide to take me seriously, you should know there's | | | | spouses. |
| even a gotcha buried in this "giveaway" law. | | | | I'm honestly not sure how this is going to play out the |
| The little gotcha comes in the form of increased | | | | rest of the year - everything that we're reading seems |
| capital gains tax. Here's how the gotcha is going to | | | | to suggest that at some point this year, Congress is |
| getcha. Last year, if you inherited an asset, your tax | | | | eventually going to get around to fixing the problem. |
| basis/cost basis was the value of that asset on the | | | | They do recognize that this capital gains situation is a |
| date you inherited the asset. So if you inherited a stock | | | | mess, and the consensus is that this year, and if not, |
| from a relative or parent that they bought 30 years | | | | definitely next year, the estate tax exemption will be |
| ago for $50,000, even if the stock is now worth | | | | changed. |
| $400,000, you would not pay taxes on the $350,000 | | | | And what a mess it is. Last year everybody had a |
| profit. This is because your stepped up basis was the | | | | $3.5 million exemption, or $7 million for a couple. This |
| market value the date you inherited the property. This | | | | year there is no estate tax, regardless of the size of |
| was true regardless of what the asset was - it could | | | | your estate. And then next year it will be a $1 million |
| be real estate, stocks, bonds, mutual funds or | | | | dollar exemption, or $2 million for a couple, assuming |
| whatever the case may be. | | | | estate planning is properly done. There just doesn't |
| Well the rules are different this year. Now, when you | | | | seem to be any logic behind any of this. From what I |
| inherit property or assets (stocks, bonds, mutual funds, | | | | have heard, when the law is fixed they may make it |
| real estate) they are not given the stepped up tax | | | | retroactive to the beginning of this year. Stay tuned for |
| basis. Which is going to put a whole lot more people in | | | | when we know of an actual, definite law that's in place |
| the position where they'll have to pay capital gains tax. | | | | - when there is we will let everyone know about it and |
| So it's kind of a good news/bad news scenario. The | | | | the impact it might have on your personal finances. |
| good news is you don't have the estate tax, while the | | | | |