Uncertainty of Estate Taxes Research Paper

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Taxes

Estate taxes, as well as Gifts tax have an influence on individuals in the United States of America. The Federal government imposes laws that govern Gifts and Estates. There has been a lot of uncertainty on Gift and Estate tax, but this cloud has finally disappeared. This reprieve is however, temporal since changes in governments mean new laws. In the year 2013, exclusion of Estate and Gift taxes has been on the rise giving couples time to plan. Tax cuts by the Bush administration had some impact, but this exclusion by president's Obama administration provides relieve to families as well as individuals. The future of Estate and Gift tax in America is bright, but there is a cloud of uncertainty with future changes in government (Gale & Potter, 2002). Therefore, planning process would ensure better practices for years to come.

Estate Tax laws

According to Baker, Bloom & Davis (2013), considering estate law, one needs to understand the meaning as well as the importance of an estate. An estate is a representation of the value in life and death. One can say that an estate represents one's net worth. In the time of death or even when one is alive, Estates are the person's entitlement to legal rights; interests, as well as other benefits accrued to the estate. However, this is not the case in instances, where an individual is bankrupt or owes creditors. In such a situation, the creditor first gets compensation before the estate change hands. The federal government has laws that govern estate management in the United States of America.

The federal government powers relate to imposing Estate Tax. This form of tax relates to tax imposed on the rights of individuals to transfer property to other individual upon death. It involves accounting for everything a person has an interest on or owns upon their death. Recent events by congress predict a different future for Estate and Gift tax. Changes of on Gift and Estate laws in the year 2013 have had an impact on multiple individuals in the economy. This last minute legislation by congress provides high exception rates, benefits spouses, and reduces the tax rates on Gift as well as Estates (Baker et. al., 2013).

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On the other hand, tax exception does not benefit rich families largely. This last minute legislation by congress was important since it prevented the country from a Fiscal Cliff.

Gift Tax Laws

Gifts laws, on the other hand, is a form of tax imposed when a person transfers property to other persons. Gifts are a one of the providers of revenue for the federal government. When one considers such transfers of gifts, there is a direct and an indirect twist to such transfers. Direct consideration relates to the availability of full interest on the property while indirect consideration represents the negative. In cases where intangible, as well as tangible properties need transferring, the federal government imposes a tax on the donor (Stephen, 2009). Gifts in such transactions include stocks, real estate, cash, and other properties.

Exceptions occur in situations where the person transferring the property retains some interest. Retaining of interest by the transferor delays the process as well as tax. Unique features about Gifts relates to the procedure of transferring. In relation to gifts, the person transferring such properties does not expect to gain anything in return. In some instances, an individual obtains a return in value, which is less than the real value of the property (Stephen, 2009). In the country, Gifts Tax represents an internal source of revenue. This source covered under the Internal Revenue code imposed in section 2501 of the code. Gifts are governed under Chapter 12 of the code and under Subtitle B. Finally, Gift giving relates to an act of affection, respect, charity, and admiration by the donor to the beneficiary.

Pro and cons of the changes in the 2010 Tax Relief Act

Tax relief Act of the year 2010 has various advantages on diverse members of the country. These provisions relate to individuals as well as business units. The tax relief Act affects the income tax of individuals. This act has a positive influence on individual incomes since it reduces the tax rates. It has positive influence on dividend and capital gains for those with businesses. The Act increases dividend and capital gains. There is permanent provision of AMT relief for individuals (Tax relief act......

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