tsmith69
Jul 4 2000, 04:10 PM
A man dies is Sept 99. His estate is valued at $975,000. Included is an annuity valued @575,000 which gained $275,000 since started and a IRA worth $125,000. The estate taxes of about $77,000 are paid. I assume he now has to pay income tax on the $275,000 annuity gain and then IRA of $125,000 for a total of $400,000. that means a tax bite of $160,000. Question? Can you distribute the 00,000 to the heirs ( who are in a lower tax bracket)and let them pay the tax as income for this year?
BPickerCPA
Jul 6 2000, 12:32 AM
Depending on the beneficiary designations, the estate may have no right to this income. If for some reason of poor planning it does, the estate can always make a distribution. Don't forget the IRD deduction.
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Barry Picker, CPA/PFS, CFP
New York, NY
www.BPickerCPA.com