Category: Estates

What is the United States (federal) estate tax exemption amount for 2011?

At death, all of your assets, including retirement accounts and life insurance proceeds, are gathered together to form your taxable Estate. You can pass an unlimited amount of money to a surviving spouse without any estate tax consequences. You can also pass an unlimited amount of money to charities designated under IRS Section 501(c)(3). However, you can only pass $5 million to any other individuals, such as children, grandchildren, or unrelated individuals. Spouses can combine their exemption amounts for a total of a $10 million exemption for a married couple.  For all assets over $5 million (the exemption amount) that are not passing to a spouse or charity, you will pay estate tax to the Internal Revenue Service at a rate of approximately 35-50%. 

Category: Estate Planning

Does New York State have a gift tax?

No. In New York State, you can make unlimited gifts of cash or other property, without the need to report the gift or pay tax on it. Note that there are United States (federal) gift tax rules and that Medicaid rules may also apply.

Category: Estate Planning

What is the United States (federal) gift tax?

For 2011, you can give $13,000 each to as many individuals as you wish. You and your spouse may make joint gifts of $26,000 each to as many individuals as you wish. Gifts at the $13,000 level do not have to be reported to the Internal Revenue Service. Any gifts over $13,000 ($26,000 for joint spousal gifts) must be reported to the Internal Revenue Service by filing Form 709 (United States Gift Tax Return). Each person has a $5 million gift tax exemption, which means that there is no gift tax owed to the Internal Revenue Service until the total of all gifts in excess of the $13,000 (or $26,000) level reaches $5 million. At that point, the donor (the person making the gift) will have to pay gift tax at a rate of approximately 35-50%. Note that using up your $5 million gift tax exemption will reduce your United States (federal) estate tax exemption. There is no effect on New York State estate tax, since New York State does not have a gift tax.

Category:  Medicaid

What Is the Difference Between Medicare and Medicaid?

Medicare is a federal program which is available to individuals who are 65 years of age and older, as well as certain disabled individuals.  Presently, Medicare provides health care for approximately 40 million elderly and disabled Americans without any asset or income requirements.  Medicare does not provide coverage for custodial care, which is generally most of the care a nursing home patient receives.

Medicaid is a federal program which provides medical care to the poor, to children, and to pregnant women living under the federal poverty level.  It is funded jointly by the states and the federal government, and is currently administered at the county level.