William Byrnes' Tax, Wealth, and Risk Intelligence

William Byrnes (Texas A&M) tax & compliance articles

Estate and Gift Taxes, Tax Cuts and More

Posted by William Byrnes on September 14, 2010

Why is this Topic Important to Wealth Managers?  Author Ben Terner of the Panel of Experts offers detailed information that has a direct affect on clients’ planning objectives as it relates to estate and gift tax.   Provides a general discussion as well as detailed analysis of the current law and the affect of Congress’ current indecision.

Generally, “[g]ross income does not include the value of property acquired by gift, bequest, devise, or inheritance.” [1] Which means gift income or inheritance income received by the beneficiary is not taxable income to the individual who receives property by such gift, bequest, devise, or inheritance. [2] “Although the donated or inherited property itself is not taxable, income derived from such property is includable in gross income.” [3]

Read the analysis at AdvisorFYI

2 Responses to “Estate and Gift Taxes, Tax Cuts and More”

  1. Michael Eiser said

    I thought the limit for such a gift was $10,000/year per individual.


  2. Dear Michael

    I think that you are referring to the annual exemption amount for gift tax. See http://www.irs.gov/businesses/small/article/0,,id=108139,00.html

    However, after exemption, the 2002 rates and possible 2011 rates were/are, top gift tax rate of 55 percent which applies to the amount of the gift that exceeds $3 million. A 53-percent rate applies to the amount of the gift that exceeds $2.5 million. The lowest rate would be imputed at 18% for gifts or estate transfers up to $10,000. See http://www.law.cornell.edu/uscode/uscode26/usc_sec_26_00002001—-000-.html


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