dating in your 20s - Tax treatment of liquidating trusts

Your taxable income is not the same as your total income, but is your income after deductions and exemptions.

Look for the line on your tax return labeled Taxable Income.

tax treatment of liquidating trusts-16

Careful tax structuring of the selling entity, spinning off the selling entity's assets and properly allocating the purchase price among sold assets, intangibles and employment agreements will maximize the tax benefits to clients who sell or purchase a business.

The current combined 53.25 percent maximum tax rate on an asset's sale gain should be contrasted with the sale of the business by a corporate stock sale which produces only one level of tax on the gain for a low combined 21.04 percent maximum federal and California capital gain rate.

The tax-deferral feature of US Savings Bonds gives you this kind of flexibility.

Within the range of the 30-year-life of a Savings Bond, you can choose when to redeem the bond and pay the income tax on the interest you’ve earned.

The income tax rate you pay on your last few dollars of your income is called your IRS tax bracket or your marginal tax rate.

If you can move income from year-to-year, you will pay the least in taxes if you move your income to the year in which you are in the lowest tax bracket and have the lowest marginal tax rate.

Whether earnings are retained in a partnership or distributed to partners has no affect on the taxation of those earnings, since the partners have to pay tax on the earnings whether they are distributed or not.

Earnings are distributed to each partner's capital account from which distributions are charged against.

since taxable years beginning on or after July 1, 1987.

There is no lower California capital gain rate for corporations or for individuals.

This 2006 Tax Act extends the 15 percent federal capital gains and dividend rate for two additional years until December 31, 2010.

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