List and describe the four basic types of taxes on wealth when transferring an estate, inheritance, or gift from one person or party to another person or party.
What will be an ideal response?
1. Estate Tax - The federal estate tax is a one-time tax the government charges for your right to transfer your property upon your death. There are exceptions if the estate is transferring directly to your spouse, or if the estate is below a certain threshold. Only estates that exceeded $11,180,000 in 2018 needed to file an estate tax return.
2. Estate and Trust Income Tax - Unlike the estate tax, which is a one-time transfer tax, the estate and trust income tax is an ongoing tax based on the income generated by the investments inside of the trust. Trusts must file quarterly estimated income taxes. The taxable income for estates works very similarly to individual income taxes.
3. Inheritance Tax - Inheritance taxes are one-time transfer taxes, similar to estate taxes, but are levied by individual states. Similarly to individual income taxes, each state has different rules for exemptions, deductions, and tax rates. A majority of states do not have an inheritance tax, and others are considering either eliminating the inheritance tax or increasing the exemption level. States have an incentive to eliminate the estate tax to prevent wealthy residents from leaving their state when they become elderly to avoid the inheritance tax for their survivors.
4. Gift Tax - Gift taxes are a form of transfer tax. When you transfer an asset from yourself to someone else, the IRS allows up to $15,000 (2018 limit) of gifts to a single individual in a given year without tax consequences. The gifts do, however, count against your lifetime federal estate exemption, which was $11.18 million in tax year 2018. If you are fortunate enough to have a friend or family member wealthy enough to gift you a large dollar amount, you are not responsible for paying the gift tax. The person gifting the money or asset is responsible for paying any taxes due.
You might also like to view...
The lower classes use more restrictive codes than do the upper classes. How does this knowledge change the way insurance might be sold to a working-class man compared to an upper-class man?
A) The promotion to the working-class man should emphasize his immediate satisfaction in knowing that his family will be cared for, while the upper-class promotion should emphasize the long-term consequences of the choice. B) The promotion to the working-class man should emphasize the long-term benefits of insurance, while the upper-class promotion should emphasize the short-term consequences of the choice. C) The promotion to the working-class man should emphasize pictures while the upper-class promotion should emphasize words. D) Both men would receive the same ad because elaboration codes have been found to be irrelevant to this product category.
When entering Japan, it is recommended that foreign companies offer better quality, lower price, or a distinctive positioning as a foreign product
Indicate whether the statement is true or false
Why is sustainable business local and global simultaneously?
A. Sustainability is a borderless concept. B. It requires a simultaneous focus inside the business and widely outside it. C. Because all business is global, and all business requires a local presence. D. Because we have no global businesses that are sustainable unless they are also local.
What are the reasons a manager should be familiar with basic legal principles?
What will be an ideal response?