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Conference nyoss1::market_investing

Title:Market Investing
Moderator:2155::michaud
Created:Thu Jan 23 1992
Last Modified:Thu Jun 05 1997
Last Successful Update:Fri Jun 06 1997
Number of topics:1060
Total number of notes:10477

729.0. "estate avoidance after death" by SWAM1::KIRBY_KR () Fri Jun 03 1994 20:29

    I am looking for some information on avoiding estate taxes after the
    person passes on.  I looked in note 488 but it mostly concerned
    planning prior to death to avoid taxes. If there is another note, point
    me in the right direction.
    
    Here is the issue.  My mother-in-law's mother recently passed away and 
    left her about 15k.  While discussing some investment options she
    mentiond that she wanted to avoid state tax and estate tax. 
    
    I am familiar with tax free mutals for the state tax but not with 
    estate avoidance.  I tend to work more with the equities.
    
    Any advice would be appreciated.
    
    Kris 
    
    
    
    
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729.1REDZIN::COXSun Jun 05 1994 11:3616
Since my references are packed in box #??, I will answer in the generic...

The FED and all states have a $$ value of inheritance below which there is no 
tax owed by the inheritee.  Usually, that number in in the hundreds of 
thousands.  Offhand, I connot recall a state where $15K is taxed.  

Of course, once you take the inheritance and re-invest it, you are then taxed
on that income/cg.  And I doubt that state taxes on the income off a $15K
investment to a retired person (a presumption, here) are going to be of
paramount importance. Take the $15K and put it in Fidelity Equity Income II or
similar lowish risk, excellent return, Growth_&_Income fund as long as the
taxee's bracket is 28% or less. 

As Always, For What It's Worth.....

Dave
729.2The Estate pays the taxesROYALT::DHILLMon Jun 06 1994 14:423
    And to add to the previous note, it's the ESTATE and not the inheritee
    that pays the taxes.  Any distribution is made AFTER taxes are paid,
    so is NOT taxable income to the inheritee/distributee.
729.3Not necessarilyI18N::GLANTZMon Jun 06 1994 16:362
    At least in MA and MD, the estate MAY choose to pay inheritance taxes
    or it MAY choose to pass that obligation on to the beneficiaries.
729.4$$ value for MA stateDCEIDL::WONGDavid Wong @ZKO 2-3Tue Jun 07 1994 13:2310
    
>> 	The FED and all states have a $$ value of inheritance below which 
>>    	there is no tax owed by the inheritee.  Usually, that number in in
>>    	the hundreds of thousands. ...
    
    	Does anyone know offhand what the $$ value is for MA state before
    	the inheritance tax kicks in?  I know the FED's $$ value is
    	600,000.
    
    	thx, david.
729.5mass will align with fedsNOVA::ABBOTTRobert AbbottTue Jun 07 1994 14:529
re .4

	I don't know the exact amount at the moment, but I
	do know that the Mass threshold value is moving to
	align with the fed. value of $600K. There's an increment
	this July and then a step up to $600K in July 95.


	Rob, who just went through estate planning.
729.6Check back issues of MoneySFC01::GREENECASE: No Pain, No Gain!Tue Jun 07 1994 15:045
    
    Check out Money magazine.  An issue several months back (3-9 months?)
    had a nice summary of inheritance tax issues state by state.
    
    Dave
729.7STOWOA::GIUNTAWed Jun 08 1994 12:284
    The MA limit was $200,000, but as noted in a previous reply, they are
    gradually changing it to move up to the $600,000 Federal limit.
    
    I'm not sure when it will be completely phased in.
729.8$100,000 per year until 199618889::BEAULIEUWed Jun 29 1994 16:255
    
    when my father passed away in 1992, the state limit was $200,000.
    During that year it was announced that the limit would be increased by
    $100,000 per year (beginning in 1993) until it reached the Federal
    Limit of $600,000 which means that the limit will be reached in 1996.