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Estate Taxes in 9 mo.?

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M

moza

Guest
I live in Washington State.
My mother has a rather large estate. Is it true that upon her death we are liable for the estate tax which is 65%? And that we have 9 months to pay it to the government in cash? Right now my sister and I are looking at a tax of over 6 million dollars. We have been trying to get her to gift, turn business over to us (as dad had wished) etc. but not working. Help!
 


ALawyer

Senior Member
No, you are relying on information that is partially true and partially false.

First of all, gifting things to you will not materially help. To the extent a gift exceeds $10,000 the value eats away the $675,000 genenral estate tax exemption that will increase next year and for many years thereafter until it goes away in 2010.
.
The exemption is much higher now if the assets consist of certain small business or farm interests.

The tax generally is due in 9 months, but extensions are readily available --and again there are special rules already built in if and to the extent the estatesists of farms and small businesses.

There are many SMART ways your mother can and should plan to reduce the estate tax bite should she die. They include a family limited partnership and life insurance. Most of these will allow her to exercise the control she wants also.

The estate tax -- even the marginal rate -- is NOT 65%. It starts at 37% and goes to 50% and is actually scheduled to be reduced over the coming years before it goes to ZERO in 2010.
 

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