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Flashcards in Tax - Estate Trust Taxation Deck (24):
1

Property transferred while taxpayer is living

Gift and Estate Taxation

2

$14,000 per year per spouse to each individual

In order to get the exclusion, the recipient must immediately acquire a present interest in the property and get unrestricted access to the property and all of its benefits

Gift and Estate Taxation

3

If the Gift is an annuity, use Present Value to determine the gross Gift

Gift and Estate Taxation

4

Gross Gifts
- 1/2 of Gifts (treated as given by spouse)
- Total # of donees x $14,000 exclusion
= Taxable Gift

Gift and Estate Taxation

5

Recipient must gain ownership and all rights to property to get the annual exclusion. If recipient merely gains a future ownership, then the present value of the Gift is 100% taxable to donor and cannot exclude from Gift tax calc

Gift and Estate Taxation

6

Tuition and medical expenses paid directly to the provider organization (note: NOT books or dorm fees)

Political contributions

Charitable Gifts

Unlimited Gifts to spouse

Gift and Estate Taxation

7

If a loss on sale, basis is FMV on the date of the Gift

If a gain on sale, basis is same as donor's basis

No G/L if donor basis is less than sales price, and sales price is less than FMV @ Gift date

Gift and Estate Taxation

8

Calendar-year basis only

Due April 15

Gift and Estate Taxation

9

Income distributions are optional
Accumulation of income ok
Charitable contributions ok
Contributions using tax-exempt income are not deductible
Allowed personal exemption of $100

Key Point: Distribution of Trust corpus (principal) ok

Gift and Estate Taxation

10

Income distributions mandatory

Accumulation of income disallowed

No charitable contributions

Distribution of Trust corpus DISALLOWED

Allowed personal exemption of $300

Gift and Estate Taxation

11

Trusts can have a Net Operating Loss

Any unused NOL flows through to the beneficiaries

Gift and Estate Taxation

12

Expenses and fees from tax-exempt income are not deductible for either a Complex or Simple Trust

Gift and Estate Taxation

13

After the death of the donor

Gift and Estate Taxation

14

The First $5,250,000 is exempt with a 40% tax on amount above that

Gift and Estate Taxation

15

Medical expenses paid after death, but incurred within 1 year of death go on decedents personal tax return

Gift and Estate Taxation

16

Estates can have a Net Operating Loss

Any unused NOL flows through to the beneficiaries

Gift and Estate Taxation

17

Cash and Property FMV at death, or alternate valuation.

Gift and Estate Taxation

18

When two non-spouses jointly own property

FMV at death X % Ownership = Amount in Estate

Gift and Estate Taxation

19

1/2 of marital assets go to deceased spouses Estate

Gift and Estate Taxation

20

A, B, and C own property

If A dies, FMV of As share goes to heirs

Gift and Estate Taxation

21

Property received through inheritance not income to recipient

Property value is FMV at date of death or 6 months later

If property is sold prior to 6 month date and the alternative date is used, FMV at date of sale is used to value property

Basis in property automatically assumes LT holding period

Gift and Estate Taxation

22

DNI = Taxable Income Expenses (from income production)

Trust beneficiaries only pay tax if earnings are distributed

Estate beneficiaries pay tax on DNI, regardless if distributed

Gift and Estate Taxation

23

If a tax exempt organization has more than $1,000 of UBI, it must file a Form 990-T

Gift and Estate Taxation

24

Organized and Operated exclusively for exempt purposes

No earnings can benefit an individual or private shareholder

Cant attempt to influence legislation as a major part of its activities

Cant campaign politically

Gift and Estate Taxation