Assume that you are a married individual and you have a living-trust with all yo
ID: 2424078 • Letter: A
Question
Assume that you are a married individual and you have a living-trust with all your assets (home, investments, cash accounts). Your spouse is both a trustee and beneficiary of that trust. You also live in joint tenancy with right of survivorship State where your death means your spouse takes ownership of all assets that are shown as joint tenancy. For example, if a bank account has both your names, the bank account transfers over to your spouse without tax consequences. If the bank account is not in both your names, it goes into the Estate. The same applies for real estate and other investments. The general rule would be that your major assets would be under the name of the Trust, and all other assets would be listed as joint tenancy. However, there are few areas to consider: What are the tax benefits of moving assets to a living or irrevocable trust? Do both types of trusts file a tax return, or taxable income and expenses "passed through" to you? FINAL QUESTION FOR EVERYONE What is the solution to our tax revenue shortages?? We have a tax system that tries to modify taxpayer behavior and is constantly changing, but is not collecting enough revenue to cover expenditures. Some think corporations are paying too much, but they get the benefits of the US economy and protection of our laws - and if they don't pay, then the individual taxpayer has to pay. However, as we now know, the individual taxpayer already carries the majority of the tax burden, and if the wealthiest don't pay their fair share, the lowest earners have to pay. The bottom line is someone has to pay - the question is how to make that equitable. Thoughts?
Explanation / Answer
if the assets are transfered to an irrevocable trust then the asset will be charged to tax in the hands of the person to whom the asset have been transfered. so in case of irrevocable transfer the tax has to be born by the transfree.
and now for the equitable thought of taxation it is very subjective to decide that who is getting more exploited with the taxes i.e. the low earners or the higher ones it is a matter which is taken care while preparing the budgets by the government.