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Posted by Rich Carreiro on February 1, 2008, 11:57 am
photoguy_222@yahoo.com writes:
> My father died recently, and left our family a
> surprising amount of money. We lived poorly
> all our lives, and knew that he was saving a lot
> of money. But we never expected it to be this much.
>
> My mother will make so much money on the
> interest, that she will now have to pay serious taxes.
> Something my dad hated.
She has the wrong perspective. There's an easy way
to have no taxes -- have no money. What one wants
to do is maximize after-tax returns, not minimize
taxes.
And remind her that the tax rate is less than 100%.
So even if she pays $45 in taxes on her next $100
of interest, she's still $55 better off than if
she didn't earn the interest at all.
> She has decided to give much of the inheritance to
> her children. This way, she will pay less taxes.
> This will amount to hundreds of thousands of dollars
> for each of us.
Is she a US citizen or green card holder? If so, with
that kind of money involved, she may end up paying
thousands and thousands of dollars in *gift* taxes.
> My brother and I live in the United States.
> We want to put this money into tax sheltered vehicles.
Why?
See my remark above about maximizing after-tax returns,
not minimizing taxes.
--
Rich Carreiro rlc-news@rlcarr.com
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