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Question for the financial type gurus
My brother and I in the process of going through all of the info pertaining to our mom's estate. We have some life insurance money coming that is all tax free. The rest of the money is subject to inheritance taxes in which we're given an $100k exemption.
Of particular interest is an annuity that my mom had that was on a pre-tax basis, therefore it is subject to income taxes based upon where I fall in the tax bracket. I used Turbo Tax to add in my half of the annuity portion(along with my income, dependents, deductions, etc) to see if it would throw me into a higher tax bracket. Fortunately, whether I added $1 or the actual amount of my share, the tax percentage on that additional income was the same. If I put in amounts substantially higher than that, it did show being taxed at higher rates. Thus, I believe I'm not paying a higher penalty on the taxes to take a lump sum distribution over spreading it out beyond this year. Would you agree with this assessment?
Once you go through some of this, you REALLY learn what a sham inheritance taxes are. You pay taxes on what you earn all your life, only to have the government keep you from giving all of it to your kids without getting their hands on even more of your money. I guess the only way you can really "hide" some of it is to continually make a maximum gift allowed each year to your kids to keep that portion exempt. It's just a matter of how you can cook the books so to speak to make it happen before it's too late.
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If you smell-l-l-l-l-l-l what The Rock is cookin!!!???
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08-25-2008, 01:42 PM
Question for the financial type gurus
