Understanding,the,Estate,Tax,y finance, share, loan Understanding the Estate Tax


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If you have inherited an estate from a relation or friend that has recently passed away you will need to know what is the estate tax, so that you don't get stung without prior knowledge. Basically in the USA anyone with such an inheritance where the estate is worth over $3. 5 million will make them eligible for this tax. If you already have this amount of money within your own savings it would be best to pay it from that, especially if you wish to keep the estate within the family. If this is not the case and you cannot get the money together you will have to sell the estate so that you can pay the tax that is due on it, there are exceptions though that I will tell you more about as you read on. The amount that has to be paid each year in tax and the amount you will be exempt from paying any tax on will be varied annually. One example is during 2006. In this year the amount no tax had to be paid on was $2 million, however those that were married had an exemption of double that amount meaning that no tax was paid on $4 million. This meant for some people they became totally exempt from having to pay the tax at all. The time you have to pay the tax will be 9 months from the day the original owner died. One of the exemptions to this time is if a business is ran from the estate. This will not exempt you from paying but will allow you to pay it in installments over 15 years. This will mean that you will be able to keep a family business where it should be, in the family, plus have the chance to make the tax money without having to sell up. If the estate you inherit is still used as farming land you can get a discount further, this will mean that you can get between a quarter and half of the final value without the estate tax, you will however have to pay on the estate tax rate on the rest. To be eligible for this waver of tax, the farmland has to remain within the family for 10 years or more, and you cannot sell up over this period, or you may find that the extra tax will be recovered from you. Many will not have to worry about this as only about 1% of the population will come under the tax rate category to be taxed.

Understanding,the,Estate,Tax,y

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