How To Pay Zero Estate Taxes: Your Guide to Every Estate Tax Break the IRS Allows

336 Pages·2000·0.79 MB·English

by  Jeff A. Schnepper

HOW
TO PAY
ZERO
ESTATE
TAXES
Jeff A. Schnepper
Also by Jeff A. Schnepper:
How to Pay Zero Taxes
(now in its seventeenth annual edition)
HOW
TO PAY
ZERO
ESTATE
TAXES
Jeff A. Schnepper
McGraw-Hill
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DOI: 10.1036/0071420800
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Dedicated to my two daughters, Brandy and Allison;
my two sons, Josh and Mario; and the reason for my
being—my Barbara Alice—and her kitten, Fred, just
beclaws.
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Contents
INTRODUCTION ix
CHAPTER 1
How Estate Taxes Work 1
The History and Mechanics of the Federal Estate Tax 2
So Where Do We Stand Now? 7
The Federal Gift Tax 10
The Federal Estate Tax 12
CHAPTER 2
This Book Will Save You Money 15
CHAPTER 3
Living Wills 17
CHAPTER 4
Durable Power of Attorney 24
CHAPTER 5
Testamentary Wills 36
Pour Over Wills 64
CHAPTER 6
Irrevocable Life Insurance Trusts 109
CHAPTER 7
Family Limited Partnerships 144
CHAPTER 8
Charitable Remainder Trusts 191
vi
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Contents vii
CHAPTER 9
Private Annuities 224
CHAPTER 10
Self-Canceling Installment Notes (SCINs) 231
CHAPTER 11
Qualified Personal Residence Trusts (QPRTs) 240
CHAPTER 12
Grantor Retained Annuity Trusts (GRATs) and Grantor
Retained Unitrusts (GRUTs) 258
CHAPTER 13
How to Survive an Audit—Valuation 290
Real Estate 293
Stocks and Bonds 293
Mortgages, Notes, and Cash 299
Insurance on the Decedent’s Life 300
Jointly Owned Property 300
Other Miscellaneous Property 301
Transfers During the Decedent’s Life 301
Powers of Appointment 302
Annuities 303
CHAPTER 14
Special Situations 304
Deductions from Your Estate 305
Funeral Expenses and Expenses Incurred in Administering Property Subject to Claims 305
Debts of the Decedent 306
Mortgages and Liens 306
Net Losses During Administration 306
Expenses Incurred in Administring Property Not Subject to Claims 307
Bequests and the Like to the Surviving Spouse 307
Charitable, Public, and Similar Gifts and Bequests 307
Credits 307
The Generation-Skipping Tax 310
CONCLUSION 314
INDEX 317
Acknowledgments
I wish to thank Philip Ruppel, who insisted I write this book; Noel Day, who
transformed my mumblings into words; Stephanie S. Landis, who translated
those words into understandable sentences; and Paul Malagoli; Sayes B. Block;
Frank Kesselman; Sri Haran, CPA; and John Oxley for their professional guid-
ance and encouragement.
I also want to thank President Clinton, without whose veto this book would
not have been needed.
Jeff Schnepper
viii