With today’s economy, many families continue to struggle; only the older generation may be in a position to have disposable income. If grandparents are able and willing to help their children and gr...
You’re well aware of income taxes and sales taxes. You see federal and, where applicable, state income taxes withheld from wages; you handle your income tax obligations on annual income tax returns....
The tax rules seem pretty straightforward when it comes to deducting home mortgage interest. Homeowners can deduct interest on acquisition indebtedness (a loan to buy, build, or substantially improve ...
Each person can pass to heirs a certain amount of property free from federal estate tax. For 2008, the tax-free amount is $2 million; for 2009, it's $3.5 million. This tax-free amount is the portion o...
Congress wanted to tax the transfer of only sizable gifts, so it created an exclusion for smaller ones. Gifts that do not exceed the amount of the exclusion are never taxable. The gift tax annual excl...
When you die, the property you leave behind (called an estate) may be subject to a federal estate tax for the right to pass the estate on to heirs and beneficiaries. Under pre-2010 law, there was no e...
The federal estate tax is a tax on the right to transfer one's property at death and is based on the value of assets owned at that time. Every person is entitled to an exemption amount ($5 million in ...
After someone dies, heirs can make certain moves that will reduce estate tax and also save money for the family. Here are some of the strategies to consider: Estate tax return elections There are seve...
Being generous to your family and friends can cost you if you fail to plan ahead. While they don't owe any income taxes on money or property you give to them, regardless of amount, you as the "donor" ...
GRAT is an acronym for grantor remainder annuity trust; GRUT stands for grantor remainder unitrust. Both types of trusts are used to transfer assets with gift and estate tax savings. Here's how they w...
Years ago, wealthy families figured out a way to beat estate tax by leaving funds to grandchildren (or to children only for their life and then to the grandchildren), thereby skipping tax on the inter...
The term "estate" can have different meanings for different purposes. The "probate estate," which is comprised of assets requiring court approval to pass title to the beneficiary, includes only those ...
Spouses typically leave each other most or all of their assets when they die. These bequests can be made outright, but wealthy individuals often use trusts to make these transfers. Using trusts has se...
Whether you're a multimillionaire or have a modest nest egg, you need to think about estate planning. This is a process of creating a plan for your assets that will be carried out after you die. You l...
If you have money or property to give away to family or even friends, understand how to make the gift. Your decision can have both practical and tax implications. Outright gifts If you transfer owners...
Why make gifts? In the past, gifts to minors were a way for the family to shift income to lower-tax-bracket members in order to save income taxes overall. For example, income that might have been taxe...
- For purposes of the 3.8% additional Medicare tax on net investment income in 2013, how does this relate to rental income?
- Can I make a direct transfer of my IRA to my church and qualify for tax-free treatment (up to $100,000)? I’m 72 years old.
- I sold my residence at a loss. How do I report this on my tax return?
- We had a cleaning service clean our home because my wife could not because of her medical issues and my being away on business. Can I deduct this cost?
Intellectual Property Donations
If you give a patent, a certain copyright, or other intellectual property to charity, you can not only deduct the initial contribution, but can also claim deductions in future years for a percentage of the income that the charity derives from the property.
You can claim an itemized deduction for donations of intellectual property to charity of:
The fair market value of the donation in the year of the donation for intellectual property that you did not create (or, for self-created property, the amount that would have been ordinary income had you sold it rather than donated it).
A percentage of the income derived from the property for up to 10 years following the year of the donation.
The IRS reported that the total number of these self-employed individuals (many of whom are independent contractors) grew by 1.9% over the period from 2002 to 2005. However, growth in certain areas was more dramatic: a 9% increase in the Great Lakes area (Illinois, Michigan, and Wisconsin) and a 16% increase in Georgia.
Source: Summer 2008 Statistics of Income Bulletin
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