Beckman Weil Shepardson LLC
The American Book Building
300 Pike Street
Suite 400
Cincinnati, Ohio 45202

Phone: 513-621-2100

FAQ: Tax Law

What are dividends and how are shareholders who receive dividends taxed?

How is the basis of property determined for property acquired by gift?

What is the generation-skipping tax and how is it calculated?

What excise tax is imposed on the early withdrawal from retirement plans and how can it be avoided?

How is the gain or loss determined on the sale of a capital asset?

What are the tax consequences and reporting requirements upon the sale of a principal residence?

What are the rules for deducting home office expenses?

How is the source of income determined?

What are the reporting requirements with respect to independent contractors?

Which taxpayers are exempt from paying real estate taxes?

When is a trade or business required to collect sales tax?

Learn More: Taxation Law

Will my estate have to pay federal tax after I die?

Most estates -- at least 99% -- don't. The federal government imposes estate tax at your death only if your property is worth more than a certain amount, which depends on the year of death. But all property left to a spouse is exempt from the tax, as long as the spouse is a U.S. citizen. Estate tax is also not assessed on any property you leave to a tax-exempt charity.

Year of Death	Exempt Amount
2006, 2007 or 2008	$2 million
2009	$3.5 million
2010	No estate tax
2011	$1 million unless Congress extends repeal

What are the rates for federal estate taxes?

The current (2007) federal estate tax rate is 45%. That rate is scheduled to stay the same until 2009. There will be no estate tax in 2010 unless the current tax law is amended.

Are there ways to avoid federal estate taxes?

Yes, although there are fewer ways than many people think, or hope, there are. Here are some of the most popular:

Tax-free gifts. You can give up to $12,000 per calendar year per recipient without paying gift tax. You can also pay someone's tuition or medical bills, or give to a charity, without paying gift tax on the amount. This reduces the size of your estate and the eventual estate tax bill.
An AB trust, where spouses leave their property in trust for their children, but give the surviving spouse the right to use it for life. This keeps the second spouse's taxable estate half the size it would be if the property were left entirely to the surviving spouse.
A "QTIP" trust, which enables couples to postpone estate taxes until the second spouse dies.
Charitable trusts, which involve making a sizable gift to a tax-exempt charity.
Life insurance trusts, which let you take the value of life insurance proceeds out of your estate.

DISCLAIMER: This site and any information contained herein are intended for informational purposes only and should not be construed as legal advice. Seek competent legal counsel for advice on any legal matter.

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