Discussion:Estate income vs Personal income
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| Revision as of 15:49, 4 December 2007 Kevinh5 (Talk | contribs) (Remember he will) ← Previous diff |
Revision as of 17:36, 4 December 2007 Mtmckeecpa (Talk | contribs) (How does that wo) Next diff → |
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| {{ForumReplyPost|UserID=Kevinh5|Date=4 December 2007|Text=Remember he will get the deduction for certain estate taxes paid on his personal return as he withdraws the IRA.}} | {{ForumReplyPost|UserID=Kevinh5|Date=4 December 2007|Text=Remember he will get the deduction for certain estate taxes paid on his personal return as he withdraws the IRA.}} | ||
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| + | {{ForumReplyPost|UserID=Mtmckeecpa|Date=4 December 2007|Text=How does that work, IF, the decedent left an IRA of $900,000 that goes entirely to Billy beneficiary, and the rest of the estate, say $1,500,000 is distributed according to the will that also includes Billy, Susie, & Jimmy? | ||
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| + | How is the estate tax liability, if any, allocated among the assets? | ||
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Revision as of 17:36, 4 December 2007
Discussion Forum Index --> Advanced Tax Questions --> Estate income vs Personal income
Discussion Forum Index --> Tax Questions --> Estate income vs Personal income
| 3 December 2007 | |
| I do not deal with Estate taxes at all but have a question. An unmarried individual dies in February and leaves his Traditional IRA to a nephew or niece. In order to pay all of the Estate taxes the Estate needs to remove money from the Traditional IRA. To whom is the money removed from the Traditional IRA in December income to? The individual who died? The recipient of the Inheritance? The estate?
Thanks, Dusty | |
| 3 December 2007 | |
| Are there no other assets from which to pay the estate taxes? Why aren't the taxes being paid proportionately from all of the assets? | |
| 3 December 2007 | |
| If you choose to make payments from IRA funds, the distribution will be taxable to the beneficiary of the IRA. | |
| 3 December 2007 | |
| If the decedent left a $3 million IRA to one beneficiary, and had no other assets, then it would be equitable to pay the tax from that one asset. It would be obvious that the payment would have to come from that one and only asset.
If the decedent left a $3 milion IRA to one nephew, and a $2 million real estate portfolio to a niece, then the liquid asset, the IRA, may be the easiest asset to tap for the taxes. But then that leaves the nephew in a worse place than the niece relative to what he was supposed to inherit and what he did inherit. Now to tax him personally on it too - wow. Sounds like someone didn't do too good a job with estate planning. | |
| 3 December 2007 | |
| Or, if in the likely case, IRA is worth $100K, PA's $15G is the beneficiary's liability. | |
| 4 December 2007 | |
| Kevin and Dennis:
There is an old house that is not worth much and will take a long time to sell. There was an old car but again, not worth much. Other than that the IRA is all there is. So it is taxable to the beneficiary. Thanks, that is what I needed to know. Dusty PS: You guys are the best and yes, the Uncle did not do very good estate planning. | |
| 4 December 2007 | |
| Remember he will get the deduction for certain estate taxes paid on his personal return as he withdraws the IRA. | |
Mtmckeecpa (talk|edits) said: | 4 December 2007 |
| How does that work, IF, the decedent left an IRA of $900,000 that goes entirely to Billy beneficiary, and the rest of the estate, say $1,500,000 is distributed according to the will that also includes Billy, Susie, & Jimmy?
How is the estate tax liability, if any, allocated among the assets? | |
