Gift Tax

$21 Million Gift Tax, IRS Subpoenas And The Indiana Pacers

The case involving the Indiana Pacers, the sister-in-law of the team’s owner and a $21 million IRS tax bill isn’t over yet. In 2009, a few months prior to his death, Mel Simon gave his half of the Indiana Pacers to his brother, Herb Simon. As this transaction is scrutinized by many, the IRS has subpoenaed the Indiana Pacers for documents that assist in providing details of this alleged gift. The team, former general manager Donnie Walsh and Herb Simon have requested a federal court to issue a protective order against the IRS.

Using The Gift Tax Exclusion To Protect Your Estate

Most of us don’t have to worry about the federal estate tax or gift tax. In 2016, the lifetime gift and estate tax exemption is $5.45 million. Thus, any taxpayer while alive may give, and at death, devise, or bequeath, up to $5.45 million before any federal tax liability is created. This exemption is double for married couples, which means that a married couple can gift or leave a total of $10.9 million that will be exempt from federal estate and gift taxes.

Tax Consequences Of Selling Or Giving Your Home To Your Children

Many parents consider and assume that one of their children will succeed them in living in the family residence. Of course, this place may be the house in which the child grew up and spent a considerable amount of time. To return to such a place can be very special. But what in fact are the tax consequences of such an event? What happens if the parents wait until death? What if they want to make an outright gift of the property? Perhaps they wish to make a sale at a bargain price? What if they make a more traditional sale that involves financing?

Gifts and Inheritances Under the Tax Code (26 U.S.C. §102)

Section 61 of the Tax Code states that “except as otherwise provided in this subtitle gross income means all income from whatever source derived”. Thus, the federal tax law requires taxpayers to pay income taxes on earnings, commissions, rents, royalties, retirement benefits, investment profits, tips, fringe benefits, bonuses and almost anything else of value, unless the Internal Revenue Code specifically provides an exception to the general rule contained in §61. An exception to the general rule is §102 of the Internal Revenue Code.

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