Central District Consumer Bankruptcy Attorney's Association

Holly:
As to tax consequences:
1. No inheritance tax in CA since 1980s
2. Estate taxes repealed by sunset law in 2010 and I have not heard
that Congress changed it.
The new tax package (2001) does include a repeal of the estate tax, but itdoesnt kick-in until the year 2010. In the meantime, the estate tax
exemption increases from $675,000 ..and $3.5 million in 2009. When the year 2010
rolls around the estate tax is gone.
3. Generally life insurance proceeds not taxable if paid on cause of
death.
4. Facts don't say how house or IRA is inherited but Check if executor
or trustee, if any, has discretion over distribution.
5. Do not rollover an inherited IRA for non-spousal beneficiary. Tax
consequences are complex. A roll-over may trigger tax.
6. Debtor should get tax advice.
Good Luck starts with a strategy and a plan. Form a strategic alliance
with
Robert J. Suhajda, MS,CPA
17721 Norwalk Blvd. #43
Artesia, CA 90701
562-924-8922
Income Tax for Attorneys, Bankruptcy, IRS representation,
Fiduciary income tax returns, Estate and Gift tax returns,
Trust Protector, Independent Trustee, Court Accountings
In a message dated 2/8/2010 9:14:31 P.M. Pacific Standard Time,
roarklaw@yahoo.com writes:
Thanks, Mark. Sorry to be vague. I am just trying to get info while keeping some privacy since I don't know who all may be reading this.
Debtor was the beneficiary of a life insurance policy. The policy holder
died during the debtor's bk. Debtor is ill. Although the wild card can
exempt some of the proceeds, it won't cover them all. Debtor was not a dependent
of the policy holder, and I just read that under 703, really all debtor
can use is the wild card if debtor is not a dependent.
Debtor also inherited a house and an IRA. I am hoping we can at least rollthe IRA over into debtor's IRA and exempt it. The house does not have anyliens on it.
Debtor will get hit with taxes for this inheritance. Some of this propertywill not be exempt. If the house goes to the estate, does the estate pay
the debtor's inheritance taxes?
Jeez this simple case just got complicated.
Holly
_holly@roarklawofficholly@_ (mailto:holly@roarklawoffices.com)
T.Jessee wrote:
>
> Holly, you post does not contain enough details. Do you mean the
> debtor is the benefiary of a policy of someone who dies postpetition?
> Do you mean the debtor owns the policy prepetition and wants to cash
> it in postpetition? If it is an inheritance then it is an asset of
> the estate if the individual whose life the policy was based dies
> within 6 months after the petition was filed. If so, whatever is left
> of the wildcard can be used. If the debtor was the owner of the
> policy prepetition and it is unmatured see CCP 703.140b(7) & (8) plus
> wildcard or see CCP 704.100 if the debtor needs to use the 704's
> instead of the 703's. The debtor's needs are irrelevant in the
> analysis. The only time the debtor's needs matter in the exemption
> analysis is under 704.100(c) for matured life insuarnce policies.
> Mark T. Jessee
> Law Offices of Mark T. Jessee
> "A Debt Relief Agency"
> 50 W. Hillcrest Drive, Suite 200
> Thousand Oaks, CA 91360
> (805) 497-5868
> On Mon 8/02/10 7:31 PM , "Holly Roark" roarklaw@... sent:
> should be exempt because the debtor is ill and needs them for
> support? CCP 703 exemptions.
> Anyone have this issue come up?
> Thanks,
> Holly Roark
> holly@... [1]
>
>
> Links:
> ------
> [1] mailto:holly@ [1
> [2] mailto:roarklaw@ [2] mailto: [2] mailto:roarklaw@...?subj
> that postpetition life insurance proceeds ...
> [3] mailto:_cdcbaa@yahoogroups.cdc_ (mailto:cdcbaa@yahoogroups.com)
?subjectAnyone have experience
> arguing that postpetition life insurance proceeds ...
> [4]
>

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