Estates and Gift Tax Resources

Qualifications of a Certified Specialist in Estate Planning, Probate and Trust Law
http://www.calbar.ca.gov/Attorneys/Legal-Specialization/Legal-Specialty-Areas/Estate-Planning-Trust-Probate-Law

Internal Revenue Code and Regulations and Official Guidance re Estate and Gift Taxes:
https://www.irs.gov/site-index-search?search=estate+tax&field_pup_historical_1=1&field_pup_historical=1

Index of Applicable Federal Rates
https://apps.irs.gov/app/picklist/list/federalRates.html
What is the applicable federal rate?

The applicable federal rate (AFR) is a group of interest rates published monthly in the United States by the Internal Revenue Service (IRS) for federal income tax purposes. Every month, the IRS publishes these rates in accordance with Section 1274(d) of the Internal Revenue Code.

Primer on Sales to Defective Grantor Trusts
https://www.americanbar.org/content/dam/aba/publications/probate_property_magazine/v14/01/2000_aba_rpte_pp_v14_1_jan_feb_mezzullo.authcheckdam.pdf

This a unique type of trust structure where the income of the trust is still the grantors for income tax purposes, but the assets of the trust are excluded from his/her estate for estate tax purposes. In other words, the trust is “effective” for estate taxes, but “defective” for income taxes.

The benefit of this arrangement is that the value of the trust, and any growth thereon, are excluded from the grantor’s estate, allowing the sale of a family business to the IDGT in exchange for an interest-only installment note, without triggering capital gains taxes (since the grantor is effectively just selling the business to themselves).

Tax Basis of Inherited Assets
https://www.law.cornell.edu/uscode/text/26/1014
What is the step up in basis rule?

Step-up in basis is the readjustment of the value of an appreciated asset for tax purposes upon inheritance, determined to be the higher market value of the asset at the time of inheritance. When an asset is passed on to a beneficiary, its value is typically more than what it was when the original owner acquired it.

Do inherited IRAs get a step up in basis?

Most other assets owned by an individual receive a step-up in cost basis upon the death of the person, eliminating all capital gains on those assets up to that point in time. But not IRAs. The beneficiary of your IRA will pay ordinary income tax on any distributions at his or her rate.

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