Legal Question in Tax Law in Tennessee

Re: Gift Tax

Phew. More data is needed! Write directly to me at [email protected] or call me Wednesday at 617 527-0050.

Questions for you to answer:

a) do you mean that THEY (your parents)

retain the privilege of living there for their

own lifetimes? That's not what you wrote. If so, they'd

be giving you kids only a "remainder interest" presently.

There are IRS charts which tell what portion of the whole property value

the lifetime interest and the remainder interests are, depending mostly

upon the ages of each of your parents, assuming neither is about to die

soon. If the percentages played out to 45%, there'd be a gift of 45% of

the current market value of the land.

But there are still many factors.

Have they used up each of their $625,000

lifetime credits already? If not, no actual taxes would be due on the first

$635,000 each of value gifted. So, what's the land worth? I'm a city boy

and haven't a clue what 20 acres of farm is worth. For all I know, it's a

big fortune.

If you and your brother were to continue to operate the farm as a farm, there are other rules which

allow the taxes to be paid to be spread out over about 10 years, a huge tax break

in itself. There's a specific law for inheriting farms that is essentially a planned

loophole for the farming industry.

There are other factors yet.

Stuart Williams

Law Offices of Stuart J. Williams

21 Walter St.

Newton, MA

02459-2509

Stuart Williams

Law Offices of Stuart J. Williams

21 Walter St.