The IRS issued a new revenue ruling at the beginning of 2023 that has flown under the radar and could mean a meaningful tax increase to you or your heirs. Have a question you want to be answered on the show? Call or text 574-222-2000 or leave a comment! Want to speak with a Certified Financial Planner™? Visit or call 574-247-5898. Find more information about the Wise Money Show™ at LINKS: Be sure to stay up to date by following us! Facebook - Instagram - Twitter - Want more Wise Money™? Read our blog! Listen on Podcast: Subscribe on YouTube: Mike Bernard, CFP® offers advisory services through KFG Wealth Management, LLC dba Korhorn Financial Group. This information is for general financial education and is not intended to provide specific investment advice or recommendations. All investing and investment strategies involve risk, including the potential loss of principal. Asset allocation & diversification do not ensure a profit or prevent a loss in a declining market. Past performance is not a guarantee of future results....(read more)
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IRS Increases Taxes on Some Inheritances The Internal Revenue Service (IRS) has recently made notable changes to the tax code regarding inheritance taxes, leading to increased taxes on certain inheritances. These changes have sparked widespread concern and debate among taxpayers as they have significant implications for individuals who receive substantial assets through inheritance. Under the new regulations, the IRS has increased the tax rates for certain inheritances and eliminated some exemptions and deductions previously available to heirs. The changes primarily affect individuals inheriting high-value estates and assets, including real estate, businesses, and investments. As a result, beneficiaries in this category may now face higher tax liabilities, potentially reducing the amount of wealth they ultimately inherit. One of the most substantial changes is the introduction of a higher estate tax rate. Previously, the maximum estate tax rate stood at 40%. However, the recent revisions have increased this rate to 45%, translating into a higher tax burden for individuals inheriting significant estates. For instance, if an individual inherits an estate worth $10 million, they would now owe an additional $500,000 in taxes under the new regulations. Another significant change is the elimination of the step-up in basis provision for some inheritances. The step-up in basis allowed heirs to readjust the cost basis of inherited assets to their fair market value at the time of inheritance. Consequently, when heirs sold these assets later, they would only owe taxes on the appreciation that occurred after the inheritance, rather than the entire gain since the asset's original purchase. However, with this provision's removal, beneficiaries may face higher capital gains taxes when selling inherited assets, reducing their net profits. Moreover, the new regulations affect Generation-Skipping Transfer (GST) taxes as well. The GST tax applies to transfers of large sums of money or assets to grandchildren or individuals at least two generations younger than the benefactor. Prior to these revisions, beneficiaries could receive substantial assets through GST exemptions, reducing or eliminating the tax liability. However, the recent changes significantly scale back these exemptions, potentially resulting in higher GST taxes for those inheriting wealth through this method. While these changes primarily impact high-value inheritances, it is essential for all taxpayers to understand the implications of the revised tax code. Anyone expecting to leave or receive an inheritance needs to be aware of the potential tax consequences and plan accordingly. Consulting with a qualified tax professional or estate planning attorney can provide invaluable guidance in navigating these complex regulations and developing strategies to mitigate tax liabilities. Critics argue that the increased taxes on inheritances are unfair, as beneficiaries may already be grieving the loss of a loved one while grappling with the added financial burden. Proponents, on the other hand, contend that these changes are a necessary step in addressing wealth inequality and generating additional revenue to fund government programs. Regardless of one's stance, it is crucial to stay informed about tax changes and take appropriate actions to ensure efficient financial planning. In conclusion, the IRS's recent increases in taxes on certain inheritances have become a cause for concern among taxpayers. The changes primarily target high-value estates and assets, introducing higher tax rates and eliminating key exemptions. Understanding these revisions and seeking professional guidance is crucial for individuals involved in estate planning or receiving inheritances, allowing them to navigate the tax code effectively and mitigate potential tax burdens. https://inflationprotection.org/irs-implements-higher-taxes-on-select-inheritances/?feed_id=125147&_unique_id=64d137ac95965 #Inflation #Retirement #GoldIRA #Wealth #Investing #estateplanning #estateplanning2023 #estateplanninglivingtrust #estateplanningstrategies #financial #inheritancetax #inheritancetaxplanning #irrevocabletrust #irsincreasestaxesonheritances #korhorn #stepupincostbasis #taxableestate #taxes2023 #wisemoneyshow #RothIRA #estateplanning #estateplanning2023 #estateplanninglivingtrust #estateplanningstrategies #financial #inheritancetax #inheritancetaxplanning #irrevocabletrust #irsincreasestaxesonheritances #korhorn #stepupincostbasis #taxableestate #taxes2023 #wisemoneyshow
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