Help me w/ Tax and Estate Planning

Anyone else finding these two sections a beatdown? I am having trouble conceptually grasping why the formula that compares the relative value of gifting versus bequeathing uses an accrual taxation formula rather than deferral, IE the formula taxes the rate “rg” before compounding it, implying annual taxation. Wouldn’t it be the case that this would only be taxed on the front end as a gift, and then the actually returns would be deferred until the gift recipient decides to sell and realize those capital gains?

huhuhuhuh, you said bequeathing.

What’s a good email for you Mark, I’ll send you an email I sent to help a few folks last year? However, if you accept and post email you’ll be responsible for sending to others if asked and you think they’re deserving of it.

I accept but i don’t want to play the role of intermediary courier pigeon, so the decision is yours whether or not to send it. If I feel a.) it was helpful and b.) the people asking for it actually pose good questions and aren’t just looking for hand-outs, I will send it. I’m not going to send a thousand emails to every free-loader who asks though. Solaxun@hotmail.com

If you guys want to send it to me I’ll send anyone who asks a free photo of Ted Nugent. Email: Captain_Windjammer@freetednugentphotos.com

On it’s way. I’ll of course send to female posters who ask nicely and send naked fansign.

Hey mark CFA, Having trouble with that also. If possible can I get that email also: tgf123@hotmail.com Your generosity is much appreciated.

Mark, me too, im at nycgorilla@gmail.com kind regards, NYCGorilla

Please send to me also …realy iam in bad need for this subject ala.ziad@hotmail.com thnx

Me as well, I hate taxes even though im a CPA baby billbellamy24@hotmail.com

yo yo dont forget me! sadeejay@yahoo.com how much you wanna bet this thread continues for the next 8 months with people who keep on asking to have this e-mailed to them?

markCFAIL Wrote: ------------------------------------------------------- > Anyone else finding these two sections a > beatdown? > > I am having trouble conceptually grasping why the > formula that compares the relative value of > gifting versus bequeathing uses an accrual > taxation formula rather than deferral, IE the > formula taxes the rate “rg” before compounding it, > implying annual taxation. > > Wouldn’t it be the case that this would only be > taxed on the front end as a gift, and then the > actually returns would be deferred until the gift > recipient decides to sell and realize those > capital gains? RV(taxable gift) = FV(Gift)/ FV(Bequest) RV(taxable gift) = [PV(1- gift tax) (1+ r (1-Capital Gain Tax))^n]/ [PV (1+ r (1- Capital Gain Tax))^n(1-Estate tax)] PV *(1-gift tax) => gift the assets immediately, so gift tax applied on the front. multiply by (1+ r (1-Capital Gain Tax))^n => they use accrual taxation formula because the capital gain tax rate applied to annual return, taxed annually.

yeah my point is how can we know that it’s applied annually without them stating assumptions regarding whether or not they sell and REALIZE capital gains annually, or defer them.

This is the tax rate applied to investment income (e.g. dividend). I think the question will specify clearly. As you can see the way CFAI Textbook posting question on example 6 - “Zachary is considering gifting assets that are expected to earn a 6 percent real return ANNUALLY over the next 20 years.”

“Zachary, on the other hand, is subject to a 48 percent tax rate on investment income” => income are supposed to be taxed annually

Stating it earns an annual return says nothing about how that return is earned (Realized cap gain, unrealized, dividend, interest etc) “investment income” is pretty generic.

Mark Ciquel or someone else, send me that file billbellamy24@hotmail.com