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Tip of the Day Play the IRA Game Smart

Play the IRA Game Smart - When planning for your retirement it is always wise to do it in the right order so that you have the plan with the...

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    Inheritance Tax Calculator

    Inheritance tax is a tax that is imposed on the beneficiaries who receive property from the deceased. Each beneficiary will be accountable for any tax owed, and tax is calculated in different ways, depending upon the state you live in, the relationship you have with the deceased and other factors. Inheritance tax is separate to the estate tax, in that it is not imposed by the federal government, but instead belongs to the state.

    The tax was originally created by the state to prevent extremely wealthy families passing on giant estates to the next generation.

    The calculation is based on the value of the estate, and the relationship of the beneficiary to the deceased is used to apply a different rate. Immediate family, such as children or marital partner to the deceased will receive lower inheritance tax rates than other inheritors of the estate.

    Because different states impose different rates of inheritance tax, it is well worth consulting a legal advisor on this matter, to find out exactly all the fees and taxes involved with the transfer of the estate. This particular area of estate law is extremely murky, and not an easy subject to research and handle alone. On the whole, you should not be eligible for inheritance tax if the value of the estate is less than $1.5 million. Other exemptions include reduced rates, or no payment whatsoever in some states, for immediate family members of the deceased.

    The worse case scenario, where inheritance tax causes real jeopardy, is in the event of an uncle or aunt leaving a vast estate to a cousin. In this scenario, the cousin could be held accountable in tax for up to 50% of the worth of the estate.

    Unfortunately, there is no quick fix to this scenario, nor are there any resources online that provide an online inheritance tax calculator, probably because each state varies so much on the percentages; so be sure to get legal advice when handling this matter.

    The worse thing to do is to ignore any potential tax that you may be liable for. It is far better to handle these matters while the estate is being transferred. You should be receiving legal assistance with the estate as it transferred, so make the most of the abundant information around you. It could be far costlier in the long term if tax is overlooked.

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    Daily Definition

    Definition of the Day Permanent Financing

    Permanent Financing - When a need arises for a company or individual to purchase or develop something that is not expected to be sold in the next fiscal year, such as office furniture or manufacturing equipment, this is called a long term fixed asset. Often short term financing is required...

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