Tips for reducing taxes on parents' assets

Georgia residents who may be responsible for managing their parents' assets during their later years and after their death may want to know about the different ways taxes on the assets can be minimized. There are multiple ways to cut tax debts or defer the tax consequences.

While they are still alive, parents may be able to claim a tax deduction for selling any stocks that have losses. Because of the stepped-up basis rule, which states the value of an asset will be its value on the date of death of the owner, if a parent dies without selling the stock, any loss cannot be deducted.

However, the stepped-up basis rule is beneficial if a parent maintains ownership of all of his or her stocks that have gains or have increased in value. No income tax will be assessed on any such appreciation upon a subsequent sale.

Parents can also manipulate their IRAs to reduce tax liability. If IRA assets are sold while a parent is still alive, taxes will be assessed at his or her individual tax rate. Beneficiaries will be able to either receive a lump sum distribution or allow the IRA to grow in value as the taxes are deferred. If their parents qualify, individuals may also claim their parents as dependents to save money and reduce taxes. The requirements for claiming others as dependents include providing over half of their financial support.

This type of pre-death financial planning can reduce future income taxes on beneficiaries. An estate planning attorney could suggest other strategies that could be appropriate for a client's particular set of circumstances.

No Comments

Leave a comment
Comment Information

Upcoming Workshops

3 Easy Steps To Protect Your "Stuff" This workshop addresses frequently asked questions and common misconceptions on Wills & Trusts, Asset Protection, Nursing Home Issues, and Medicaid Qualification.

Join Now! More Workshops

Call Us Today To Schedule A Consultation

We are ready to help you start planning. To schedule an initial consultation, call us at 770-822-2723 or 866-735-9628. You may also contact us online.

ESTATE PLANNING LAW GROUP OF GEORGIA,

Johns Creek Office
11555 Medlock Bridge Road, Suite 100
Johns Creek, GA 30097

Toll Free: 866-735-9628
Phone: 770-822-2723
Fax: 770-573-3379
Map & Directions

Lawrenceville Office
1755 North Brown Road, Suite 200
Lawrenceville, GA 30043

Toll Free: 866-735-9628
Phone: 770-822-2723
Fax: 770-573-3379
Map & Directions

map

How can we help you?

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close