― sarahell, Monday, 16 October 2017 02:23 (three years ago) link
1. Give Gifts
One way to get around the estate tax is to hand off portions of your wealth to your family members through gifts. For tax year 2016, you can give any one person up to $14,000 tax-free (or up to $28,000 if you’re married and you’re filing joint tax returns). Over the course of your lifetime, you can give out up to $5.45 million of your wealth as gifts before getting hit with the gift tax.There’s no limit to the number of people you can give gifts to within a single year. So if you have an $8 million estate, you can gradually pass on your assets to your loved ones until the net value of your estate is less than (or equal to) $5.45 million.Just keep in mind that the $5.45 million threshold applies to both the gift tax and estate tax at the same time.Using our example, you could give away $2.55 million of your $8 million estate to your relatives before you die. That’ll leave your estate with a net value of $5.45 million. But if you’ve already removed $2.55 million from your estate and dodged the gift tax, only part of it ($5.45 million – $2.55 million, or $2.9 million) would be safe from the estate tax. The rest would still be taxable.
― sarahell, Monday, 16 October 2017 02:25 (three years ago) link
IRS rules require only that charities spend about 5 percent of their investment assets annually, and all or part of this amount can be spent on salaries and “expenses,” rather than devoted to the charitable purpose the charity purports to be serving. So, what happens with a charitable trust, set up by a billionaire, and controlled by one of the billionaire’s children? The child gets a job and a salary for life. Maybe a mansion to live in and entertain in as a fringe benefit. This is a great gig for the heir.
― sarahell, Monday, 16 October 2017 02:32 (three years ago) link