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Old 07-21-2020, 01:10 PM   #1
40 Deluxe
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Default Estate planning/thinning the herd

I've been reading some threads and posts on how to pass our "collections" on to the next generation(s).
My CPA (as well as other sources) tells me that a person can gift up to about 11 million dollars before any gift tax is due. It seems that the $15,000 limit we hear about is actually the amount that does not have to be reported to the IRS. Any amount over that given to one person has to be reported on Form 709 and applies to the "lifetime exclusion" of $11 million (approx.). So 99+% of us could give away our entire estate without any gift tax due (Federal, not sure about state taxes).

If we can no longer keep our car collection maintained and the barn holding our stash of parts is falling down, maybe gifting it to someone who appreciates and wants it is one way to go.
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Old 07-21-2020, 01:33 PM   #2
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Default Re: Estate planning/thinning the herd

Hereís the problem . If that person doesnít have skin in the game there
Not going to have the Passion
Iíve thought the same with some of my old Harleys canít kick start them like I use to and riding is stressful with the loss of my youth .
Finding the right person is difficult .
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Old 07-21-2020, 03:58 PM   #3
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Default Re: Estate planning/thinning the herd

40 Deluxe and Step-down, I would have room for an old Harley and more Model A Parts! Just saying..LOL!

I come from a large family where all the brothers hunt and fish together. I have gifted a number of my hunting rifles and shotguns to my nephews as they come to age. I mostly quit hunting a few years back. The look of gratitude and surprise on their faces when they borrow a gun for a hunt and try to return it but I refuse to take it back is priceless! I do always check and get permission with their fathers before doing so. I think gifting brings me more joy than they experience receiving.

Consider gifting your stash of Model A parts to friends in your local Model A club. There is always someone needing that special part. I plan to do this.
Good Day!

Last edited by Dave in MN; 07-21-2020 at 04:09 PM.
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Old 07-21-2020, 06:50 PM   #4
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Default Re: Estate planning/thinning the herd

Interesting - My Tax guy who is licensed for Illinois, Wisconsin and Federal taxes told me that tax free gifts max at $14,000 a year. And gifts still have to be reported to the IRS in case the person receiving the gift gets audited. The IRS wants proof of where the money came from. I do not know what the current max is for Tax Free Inheritances, but believe it is over a million dollars.
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Old 07-21-2020, 07:52 PM   #5
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Default Re: Estate planning/thinning the herd

30 Closed Cab... we just went thru this about 5 years ago.

In Illinois there are no death taxes, or estate taxes, or inheritance taxes for amounts under $5 million. It used to be $2 million, but that changed a number of years ago because it doesn't take very much farm property today to be worth 2 million bucks, any average farmer clears that hurdle.

So, the legislature changed the rules and upped the amount. This was from our estate attorney licensed in Illinois.

Also, the 'percentage' an executor can charge the Estate went away, also because if say you were dividing up a $5 million farm and claimed 10% or $500,000, the other heirs were raising all kinds of hell. Now you are only allowed time and mileage, and THAT has to go in front of a judge and he has to OK it.
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Old 07-21-2020, 07:55 PM   #6
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Default Re: Estate planning/thinning the herd

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[QUOTE=40 Deluxe;1911711

My CPA (as well as other sources) tells me that a person can gift up to about 11 million dollars before any gift tax is due. It seems that the $15,000 limit we hear about is actually the amount that does not have to be reported to the IRS. Any amount over that given to one person has to be reported on Form 709 and applies to the "lifetime exclusion" of $11 million (approx.). So 99+% of us could give away our entire estate without any gift tax due (Federal, not sure about state taxes).

.[/QUOTE]


Very true, we went through this years ago in Business Law classes at a local college I was attending and which was taught by an Attorney. He was very specific about what you just said. Thank you!

Here is the form from the IRS

https://www.irs.gov/pub/irs-pdf/f709.pdf

Remember that this can and will be changed if certain individuals get elected. Seems as though some people think it is a crime for you to own personal property and they want to take that away from you and 'gift' it to others.

I'll leave that up to you to figure out who that may be.
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Old 07-22-2020, 06:42 AM   #7
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Default Re: Estate planning/thinning the herd

Ask your own tax advisor.
There is a lot of Misinformation herein
There is a difference in a taxable gift and a taxable estate
As well as non-taxable both !!
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Old 07-22-2020, 04:12 PM   #8
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Default Re: Estate planning/thinning the herd

I've spend the price of at least five 500 point Model A's with attorneys and accountants trying to beat the IRS. Did the Family Limited Partnership and new trusts. As soon as you think you have the answer, there's a change in administrations and there's a slew of new rules and more taxes. Friend passed away last week with some pretty nice cars. Another friend is helping to sell them for the estate. The family is under the impression that one of the cars is valued at $250,000 based on the owner's say so. Best offer is $75,000. My stuff will be sold at what ever the market will bear and the cash will be added to the pot to be divided by heirs.


BTW, tell your wives that hot rodders will pay the best money for Model A's!
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Old 07-22-2020, 04:30 PM   #9
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Default Re: Estate planning/thinning the herd

Quote:
Originally Posted by Oldbluoval View Post
Ask your own tax advisor.
There is a lot of Misinformation herein
There is a difference in a taxable gift and a taxable estate
As well as non-taxable both !!



Quote: "There is a difference in a taxable gift and a taxable estate." True. The difference is that a gift is made during the giver's lifetime; whereas an estate is after the death of the estate owner. So different tax rules apply.
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Old 07-22-2020, 04:44 PM   #10
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Default Re: Estate planning/thinning the herd

Quote:
Originally Posted by 30 Closed Cab PU View Post
Interesting - My Tax guy who is licensed for Illinois, Wisconsin and Federal taxes told me that tax free gifts max at $14,000 a year. And gifts still have to be reported to the IRS in case the person receiving the gift gets audited. The IRS wants proof of where the money came from. I do not know what the current max is for Tax Free Inheritances, but believe it is over a million dollars.



Maybe ask your tax guy what he uses IRS Form 709 for.
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Old 07-22-2020, 05:16 PM   #11
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Default Re: Estate planning/thinning the herd

Quote:
Originally Posted by Oldbluoval View Post
Ask your own tax advisor.
There is a lot of Misinformation herein
There is a difference in a taxable gift and a taxable estate
As well as non-taxable both !!
There you go again Bill, sharing that factual information from your CPA career!
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Old 07-22-2020, 05:42 PM   #12
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Default Re: Estate planning/thinning the herd

That’s way in the rear view mirror
thank goodness! Not enough energy to endure tax seasons again!!,
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Old 07-25-2020, 05:33 AM   #13
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Default Re: Estate planning/thinning the herd

for 2020: The estate and gift tax exemption is $11.58 million per individual, up from $11.4 million in 2019. That means an individual can leave $11.58 million to heirs and pay no federal estate or gift tax, while a married couple will be able to shield $23.16 million. The annual gift exclusion amount remains the same at $15,000.

I believe the 709 and the $11.58M allow you to give out the non taxable portion of your estate before you die, however it is applied against the non taxable part of you estate. If you give out the 11.58M then your entire estate is taxable when you die. I am a CPA, but not a tax guy.
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Old 07-25-2020, 08:03 AM   #14
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Default Re: Estate planning/thinning the herd

Jim is spot on as I know it. Depending on state, there could be state tax issues
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