The IRC Section 1031 is a powerful tool for tax deferral and wealth-building in real estate investment. It allows taxpayers to defer their tax liability from the sale of an investment property and reinvest the profits in a replacement property. By exchanging more valuable properties, taxpayers can potentially increase their earning power and overall financial condition. In estate planning, the beneficiaries of real estate assets acquired through 1031 exchanges will receive a "stepped-up basis" equal to the fair market value of the property at the time of the original owner's death. This enables beneficiaries to sell the property without incurring a significant tax burden, resulting in a substantial financial improvement.
This post discusses two main pillars of estate planning in Maryland: the use of trusts and the minimization of tax consequences. Trusts are legal entities that can be established for various purposes, such as ensuring assets are distributed to beneficiaries in a specific manner or for a particular purpose. Trusts have three key players: creators, trustees, and beneficiaries, with the trustee being responsible for carrying out the instructions set forth in the trust. The post emphasizes the importance of selecting a trustee who can fulfill their fiduciary responsibility to the trust.
The post provides an introduction to fundamental terminology in the field of estate planning. It defines and explains five key terms: will, beneficiary, revocable and irrevocable trust, intestate, and power of attorney. It emphasizes the importance of having a basic understanding of these terms to ensure effective estate planning and consulting with professionals in the field.
In our most recent piece, we discussed some basic facts about the federal estate tax. Let's go over some other issues involved with Maryland’s estate tax.
In our most recent piece, we discussed some basic facts regarding the federal estate tax, Maryland’s estate tax, and Maryland’s inheritance tax. This post will discuss some of the other issues involved with Maryland’s estate tax.
This article should be sufficient to round up our series on Maryland’s state-level estate tax and inheritance tax...
Most people are aware that the government imposes a federal estate tax. However, fewer people know that individual estates often impose an additional tax on their own.