Business Estate Tax

Below are some of the more common questions and answers about Estate Tax issues.

Q:  What is “Fair Market Value”?
A:  Fair Market Value is defined as: “The fair market value is the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts.”  The fair market value of a particular item of property includible in the decedent’s gross estate is not to be determined by a forced sale price.  Nor is the fair market value of an item of property to be determined by the sale price of the item in a market other than that in which such item is most commonly sold to the public, taking into account the location of the item wherever appropriate.

Q:  What about the value of my family business/farm?
A:  Generally, the fair market value of such interests owned by the decedent are includible in the gross estate at date of death.  However, for certain farms operated as a family farm, reductions to these amounts may be available.

In the case of a qualifying family farm, IRC 2032A allows an inflation-adjusted reduction from value of up to $1,090,000 for 2014, and $1,100,000 for 2015.
A similar deduction for a qualifying family owned business (IRC 2057) was repealed beginning in 2004.

Q:  I own a 1/2 interest in a farm (or building or business) with my brother (sister, friend, other). What is included?
A:  Depending on how your 1/2 interest is held and treated under state law, and how it was acquired, you would probably only include 1/2 of its value in your gross estate.  However, many other factors influence this answer, so you would need to visit with a tax or legal professionals to make that determination.

Q:  What is excluded from the Estate?
A:  Generally, the Gross Estate does not include property owned solely by the decedent’s spouse or other individuals.  Lifetime gifts that are complete (no powers or other control over the gifts are retained) are not included in the Gross Estate (but taxable gifts are used in the computation of the estate tax).  Life estates given to the decedent by others in which the decedent has no further control or power at the date of death are not included.

Our Promise: We do not share or sell your personal information. Privacy Policy.

What Questions Do You Have For Us?

Good News! Your Answers Are Just a Free Phone Call Away.

We hate sales pitches as much as you do. Total waste of time. And we have real work to do for real families. If you decide to call, we promise you will get straightforward reliable guidance.

If you do not call, then you may never know what you missed. Most people prefer knowledge, freely shared, over ignorance compounded by gossip. Speak with a compassionate expert today.

You have nothing to lose.

© 2024 Carrier Law | Privacy Policy