Our recent two posts about the Estate Tax talked about some problems with calculating income, but focused primarily on capital gains. Today, we’ll run through an example of how other assets are subject to similar problems, such as how rents and usage charges can be complicated to assess.

Take, for example, rents on an apartment. Let’s assume that you lease an apartment and agree to pay $1,000 each month, which in DuPont Circle means that you’ll have about 700 square feet and 11 roommates. Each time you make a payment, the landlord has to pay taxes on that rent, right?

We recently covered the idea of unrealized income and why people suddenly see a bunch of income when they die. Today, we’ll discuss how the Estate Tax actually makes life easier for heirs.

With Congress currently drafting a tax bill, there have been all kinds of proposed changes and modifications to the income tax system. Whether it is changing the marginal tax brackets, the corporate tax rate, or eliminating deductions for state and local taxes, all of these are fundamentally changing how the IRS treats income. All, that is, except for one proposal: eliminating the Estate Tax.

At Summit, we strive to develop staff knowledge and enhance the intellectual capital we provide to our clients. As part of this effort, Summit is holding the first session of an eight-week course on Dynamic Forecasting on September 28th.