• Transfer Taxes

  • Aug 30 2023
  • Length: 16 mins
  • Podcast

Transfer Taxes

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  • Summary

  • Podcast Show Notes: Introduction: Welcome to "Small Bites of Business Insights," where today's episode delves into the world of wealth planning, focusing specifically on transfer taxes and how they play a crucial role in managing assets and legacies. Becca is the guest in this episode, providing valuable insights and explanations regarding transfer taxes and how they can impact individuals' financial planning. Understanding Transfer Taxes: Transfer taxes are levies imposed on assets being transferred to others, either as gifts during one's lifetime or through inheritance after death. Key transfer taxes discussed are the gift tax, estate tax, and GST (Generation-Skipping Transfer) tax. Gift Tax: The gift tax applies to transfers made during an individual's lifetime. A 40% tax rate is applied to the value of the gift, with exemptions allowing up to $17,000 per recipient annually without tax implications. The lifetime exemption for gift tax is $12.9 million per person. Estate Tax: The estate tax applies to transfers made upon an individual's death. A 40% tax rate is applied to the taxable estate, but the beneficiaries are not directly responsible for this tax; it is paid from the estate's assets. The lifetime exemption for estate tax is also $12.9 million per person. Generation-Skipping Transfer (GST) Tax: The GST tax is an additional 40% tax imposed on top of the gift or estate tax. It applies when transferring assets from one generation to a skip generation, such as from a grandparent to a grandchild. The lifetime exemption for GST tax is also $12.9 million. Ways to Minimize Transfer Taxes: Utilize the annual exclusion by gifting up to $17,000 per person each year. Make unlimited gifts for education and medical expenses directly to educational institutions or medical providers. Maximize the lifetime exemption of $12.9 million for both gift and estate taxes. Utilize the marital deduction, allowing unlimited transfers to a spouse without tax consequences. Implement wealth transfer strategies such as GRATs, GRITs, and SLATs to leverage exemptions and minimize tax burdens. Conclusion: Becca emphasizes the importance of strategic estate planning to maximize exemptions, minimize taxes, and preserve assets for future generations. Future episodes will explore wealth transfer strategies and their relevance, especially for business owners, providing a comprehensive understanding of effective wealth planning. Hosts: Dr. Kathy Gosser, YUM! Assistant Professor of Franchise Management and Director of the Yum! Center for Global Franchise Excellence www.business.louisville.edu/yumcgfe Rebecca McDade, JD - Attorney https://www.linkedin.com/in/rebecca-mcdade-86b8407a/
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