Hey so I know the estate tax ends in 2010, and then kicks back in the next year. I know that this doesn't make the gift tax go away, you still have a limit, but I heard that if you gave your entire estate away in 2010 and even it was above the unified credit, that amount gets applied to your 'estate' and when you do die, as long as you have no assets or worth, there is essentially no estate tax. So the estate is just closed and the recipient won't have to pay anything.

Is this true?

This is what a lawyer said to me once, but I'm wondering now if I didn't misinterpret or mishear what he was saying because I can't find anything that indicates that someone can give their entire estate away in 2010 and somehow get away with it tax free. It sounded like it could be a loophole, though...

Any TWW lawyers that know anything about this?

5/29/2008 2:44:59 PM

Do you trust your wife?

5/29/2008 2:46:55 PM

nvm

[Edited on May 29, 2008 at 2:47 PM. Reason : &]

5/29/2008 2:47:04 PM

lol well if you mean do i trust my wife to control my entire estate, yes. But that's irrelevant because married couples have an unlimited marital transfer, so that wouldn't matter anyways.


i'm referring to giving money to my children, so I would have to trust them not to put me in a nursing home.


this isnt' really for me anyways, i'm single and have no kids

[Edited on May 29, 2008 at 2:55 PM. Reason : .]

5/29/2008 2:49:16 PM

He's referring to The Shawshank Redemption.

5/29/2008 2:50:29 PM

le sigh

5/29/2008 2:50:33 PM

sorry to disappoint.


hopefully someone knows the answer to this

5/29/2008 2:52:09 PM

pm sent

5/29/2008 2:53:24 PM

Under the new act, the federal estate tax is repealed after Dec. 31, 2009. The act also increases the exclusion amount and decreases the maximum estate tax rate in increments until its repeal in 2010. In 2011, the federal estate tax is reinstated.

The act does not repeal the federal gift tax, however. Beginning Jan. 1, 2002, the gift tax exemption, which mirrored the estate tax exemption, will be increased to $1 million and the gift tax rate will be identical to the estate tax rate.

http://austin.bizjournals.com/austin/stories/2001/07/23/focus4.html

5/29/2008 2:53:51 PM

You should just kill yourself in 2010 and solve this predicament.

5/29/2008 2:54:23 PM

^^


yeah i read that too, but it doesn't really address this kind of specific case


gift taxes above the 12k exclusion apply at the end of your life against a unified credit, after that, you have to pay whatever the rate is (the giver, not the recipient). If all the estate was given away in a mirrored 0% tax rate, then how can they tax an empty estate?

All i can find on the internet so far has been too general to discuss such a situation

5/29/2008 2:58:39 PM