Thursday, February 10, 2011

Estate Exclusion Amount For 2010, 2011 and 2012

In 2011 and 2012 and estate tax exclusion amount is 5 million and the estate tax rate is 35%. The basis of inherited property is stepped-up basis.

For 2010, estates have two choices, either pay no estate tax or pay 35% estate tax on assets over 5 million.
(a) If you inherit property in 2010 from a estate that chose to avail unlimited estate tax exemption, the basis of inherited property remains the same as it was for the deceased owner. Your cost basis is not "step-up" but it is the "carry-over". However, you can choose to take your cost basis as "step-up" for only $1.3 million of the property. For any amount inherited over $1.3 million, your cost basis will be the smaller of the deceased owner's basis or the FMV on the date of the death. the surviving spouse will receive an additional $3 million basis "step-up".
(b) If you inherit property in 2010 from a estate that is over 5 million and that paid 35% estate tax on assets over 5 million, you can claim stepped-up basis.

Sunday, February 6, 2011

Making Work Pay Credit

Taxpayers with earned income will get Making Work Pay credit on their 2010 tax return. It is 6.2% of your earned income with a maximum of $400 ($800 if married filing jointly). You must file schedule M (Form 1040 or 1040A) to claim the credit. Include the credit on line 63 of Form 1040 or line 40 of Form 1040A. If you are filing Form 1040-EZ, include the credit on line 8 and do not file schedule M. Those with AGI of more than $95,000 ($190,000 if married filing jointly), nonresidents and dependents do not get this credit.

Saturday, February 5, 2011

Standard Mileage Rates For 2010

For 2010, the standard mileage rate for the cost of operating your car for business use is 50 cents a mile, for medical reasons is 16½ cents a mile for the cost of operating your car for determining moving expenses is 16½ cents a mile.

Due Date For 2010 Individual Tax Return

File individual taxpayers the due date for 2010 tax return is April 18, 2011 instead of April 15, 2011.