From the point of view of farm estate planners, financial retirement planning requires a concrete strategic and savings plan. In more traditional businesses employees and owners often use an IRA, 401K or other type of investment. When it comes to farmers and agribusiness owners the answer to the questions, how much do you need to save and where will it come from, brings different answers.
For employees of traditional businesses the options often include stocks. bonds, mutual funds etc. that are in no way connected to the farm business itself.
When it comes to farmers facing the financial retirement planning issue their historical perspective results in quite different actions – because their assets are almost all tied up directly or indirectly in the farm. Sure, they need a team of professionals to assist them, but they must be a team that understands the reality that there really is no savings outside the farm business itself.
And if you have made good investments over the years or your farm business has grown in value and have a large net worth, you may also need to plan for trusts and estates for your children, grandchildren or other beneficiaries. Professional financial planners can help. A lawyer is necessary for drawing up trusts and estates. Accountants can provide some information. Basically, you need a team.
These are some of the things they will help you figure out.
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May 7th, 2009 | Posted in farm estate planners, financial retirement planning, trusts and estates | No Comments
I am still trying to do our 2008 1040. We’ve never been late filing our tax return. Father in law died 2/20/08 and we had to sell his home(at his request in his will), and divide it three ways. My husband is co executor. I am having trouble doing our personal tax return, because I don’t know which form to start with. Do I have to do a 1041 first or can I just start right in on our 1040? or do I have to do a sch k-1 then the sch d, then the 1041, then the the 1040? Our lawyer says we shouldn’t owe any taxes on the amount of the sale, but don’t you still have to report it on one of these forms? Any one who knows where to start on the paper work, I would be so grateful. Thank-you so much in advance.
P.s. I have been doing our personal tax returns for over 20 years, but never have I had this much difficulty. I know I could do this, if someone knowledgeable could just explain what comes first briefly. now this has become a challenge for me and it is hard for me to just give up and hire someone. I normally enjoy doing taxes.
If the house was by the estate in 2008 and you are shutting down the estate, you file the 1041 FIRST. Why? Because you will be issuing a K-1 to each beneficiary and they need the data for *their* tax return. If they file their 1040 first and then get the k-1 they’ll have to amend.
When you sell a house quickly after death, there isn’t any gain. There’s actually a loss and the loss gets passed through to the beneficiaries on the LAST 1041 (that’s why I asked if you were shutting down the estate). The 1041’s schedule D will show the sale of the house. With real estate expenses, that’s almost always a capital loss since the odds are the house didn’t go up in value from the date of death.
That loss and the attorney’s fees are expenses of the estate and will offset any income the estate had. This income is usually the interest on the money sitting in the bank, final paychecks, cashing out of IRAs to the estate, etc. Except for IRA’s, I doubt you have income.
If the estate is still open (and likely to have $600 of income), then you don’t pass the loss through yet and if the income is negative, no K-1s.
If you have a question about income to the estate, see IRS publication 559. Income with respect to a decedent. Income before death goes on a 1040. Income after death in his SSN or the estate’s EIN goes on the 1041. Income after death in someone else’s SSN (say interest on a bank account with POD or survivorship) goes directly to their return.
If you did an IRA, come back and let’s talk.
August 25th, 2010 | Posted in trusts and estates | 1 Comment
Saving for retirement came right off the top of our salaries. We had a plan that ensured we retired before age 60 and with enough to live very well. Plan included having mortgage paid and no debts by the time retirement came. Worked great.
August 25th, 2010 | Posted in financial retirement planning | 1 Comment
http://www.hallandhallfamilylaw.com 804.897.1515
The attorneys at Hall & Hall, PLC help clients with estate planning matters. If you need representation in Virginia, contact the firm in Midlothian.
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August 24th, 2010 | Posted in trusts and estates | No Comments
