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Estate and Ownership Transfer Tax Policy and Regulations in Connecticut Fairfield Essay

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Updated: Jun 20th, 2022

Introduction

The government taxes the property of individuals after their death. As a result, taxation does not affect the successors as they inherit an after-tax estate. However, the heirs must pay any outstanding property taxes from the deceased individual’s estate’s income. Therefore, family-business proprietors should be extremely careful when planning to reduce their property taxes to ensure that the estate beneficiaries do not suffer in the future.

Main Body

In Connecticut Fairfield, tax laws such as the unified credit exemption regulations are complex because they keep changing. For instance, the government increased the exemption to $1 million, $3.5 million, and $5.12 million in 2002, 2009, and 2012 respectively (Tax Foundation). Due to this reason, property owners try to look for ways of reducing government taxes on their property in case of death. However, some proprietors forget to address essential generational transfer aspects such as the relationships with their relatives, the CEO’s retirement needs, and their monetary requirements. Therefore, proprietors should aggressively plan their business continuity early by properly leading their families and estate managers to avoid using the tax courts in the future when the owners are dead.

Governments introduce different laws on property inheritance taxes every year. Before the millennium, the American tax laws allowed authorities to credit inheritance taxes to business owners’ accounts. Governments use the credits to improve the economy, particularly during economic depressions (Lahijani 97). In early 2005, the American tax laws permitted the authorities to treat inheritance taxes as deductions but not as credits. This decision had a two-fold effect because some states’ tax liabilities increased instead of decreasing. Since the implications for individual businesses differ depending on the state and property, estate owners do not have to consult tax experts. However, the proprietors should plan their estates appropriately and transfer essential values to the next generation, including non-family members who might manage their property in the future.

Conclusion

In summary, tax laws such as the unified credit exemption regulations keep changing in Connecticut Fairfield, and other parts of the world. These amendments greatly affect citizens either positively or negatively as the tax liabilities increase or decrease, and the amounts of money transferred to estates’ beneficiaries change. Therefore, estate owners should considerably reduce their property taxes according to the tax laws to ensure that those who inherit the estates remain comfortable in the future.

Work Cited

“Federal Estate and Gift Tax Rates, Exemptions, and Exclusions, 1916-2014.” Tax Foundation, 2014, Web.

Lahijani, Richard. “Happy 45th Anniversary to the Earned Income Tax Credit. Thoughts on One of the most Expensive Costing Credits in the US Tax Law.” The Journal of Applied Business and Economics, vol. 22, no. 4, 2020, p. 97.

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IvyPanda. (2022, June 20). Estate and Ownership Transfer Tax Policy and Regulations in Connecticut Fairfield. https://ivypanda.com/essays/estate-and-ownership-transfer-tax-policy-and-regulations-in-connecticut-fairfield/

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IvyPanda. (2022, June 20). Estate and Ownership Transfer Tax Policy and Regulations in Connecticut Fairfield. Retrieved from https://ivypanda.com/essays/estate-and-ownership-transfer-tax-policy-and-regulations-in-connecticut-fairfield/

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"Estate and Ownership Transfer Tax Policy and Regulations in Connecticut Fairfield." IvyPanda, 20 June 2022, ivypanda.com/essays/estate-and-ownership-transfer-tax-policy-and-regulations-in-connecticut-fairfield/.

1. IvyPanda. "Estate and Ownership Transfer Tax Policy and Regulations in Connecticut Fairfield." June 20, 2022. https://ivypanda.com/essays/estate-and-ownership-transfer-tax-policy-and-regulations-in-connecticut-fairfield/.


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IvyPanda. "Estate and Ownership Transfer Tax Policy and Regulations in Connecticut Fairfield." June 20, 2022. https://ivypanda.com/essays/estate-and-ownership-transfer-tax-policy-and-regulations-in-connecticut-fairfield/.

References

IvyPanda. 2022. "Estate and Ownership Transfer Tax Policy and Regulations in Connecticut Fairfield." June 20, 2022. https://ivypanda.com/essays/estate-and-ownership-transfer-tax-policy-and-regulations-in-connecticut-fairfield/.

References

IvyPanda. (2022) 'Estate and Ownership Transfer Tax Policy and Regulations in Connecticut Fairfield'. 20 June.

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