Question about safe deposit box at bank

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You don't have to but the bank must report that you have a safety deposit box to the IRS. This is a relatively new rule so beware.

What purpose does this serve? The bank reporting the box to the IRS... Is it so that the IRS can come after what's in the box after you die?

Or beforehand if they suspect that you are up to something or underreporting (or you're just an unlucky randomized audit).

and needless to say: so that the IRS can make sure to collect the inheritance tax from your inheritors, plus fines and interest, if they "forget" to pay the tax.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You don't have to but the bank must report that you have a safety deposit box to the IRS. This is a relatively new rule so beware.

What purpose does this serve? The bank reporting the box to the IRS... Is it so that the IRS can come after what's in the box after you die?

Or beforehand if they suspect that you are up to something or underreporting (or you're just an unlucky randomized audit).

and needless to say: so that the IRS can make sure to collect the inheritance tax from your inheritors, plus fines and interest, if they "forget" to pay the tax.

So for posessions like jewelry, for example. How can the IRS make sure you pay an inheritance tax on this? Are they going to have a representative there when you open the box and inspect the contects? I don't get how the inheritance tax can be enforced on a safe deposit box and its contents as pp suggests?

[Anonymous]

Anonymous wrote:

Anonymous wrote:You don't have to but the bank must report that you have a safety deposit box to the IRS. This is a relatively new rule so beware.

What purpose does this serve? The bank reporting the box to the IRS... Is it so that the IRS can come after what's in the box after you die?

Presumably so if you're audited and suspected of hiding money they can get a court order to look in your box.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You don't have to but the bank must report that you have a safety deposit box to the IRS. This is a relatively new rule so beware.

What purpose does this serve? The bank reporting the box to the IRS... Is it so that the IRS can come after what's in the box after you die?

Or beforehand if they suspect that you are up to something or underreporting (or you're just an unlucky randomized audit).

The IRS doesn't do random audits. Not in about 20 years, not counting a single compliance measurement program a few years back.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You don't have to but the bank must report that you have a safety deposit box to the IRS. This is a relatively new rule so beware.

What purpose does this serve? The bank reporting the box to the IRS... Is it so that the IRS can come after what's in the box after you die?

Or beforehand if they suspect that you are up to something or underreporting (or you're just an unlucky randomized audit).

and needless to say: so that the IRS can make sure to collect the inheritance tax from your inheritors, plus fines and interest, if they "forget" to pay the tax.

So for posessions like jewelry, for example. How can the IRS make sure you pay an inheritance tax on this? Are they going to have a representative there when you open the box and inspect the contects? I don't get how the inheritance tax can be enforced on a safe deposit box and its contents as pp suggests?

We don't have an inheritance tax in this country. We have an estate tax.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You don't have to but the bank must report that you have a safety deposit box to the IRS. This is a relatively new rule so beware.

What purpose does this serve? The bank reporting the box to the IRS... Is it so that the IRS can come after what's in the box after you die?

Or beforehand if they suspect that you are up to something or underreporting (or you're just an unlucky randomized audit).

and needless to say: so that the IRS can make sure to collect the inheritance tax from your inheritors, plus fines and interest, if they "forget" to pay the tax.

So for posessions like jewelry, for example. How can the IRS make sure you pay an inheritance tax on this? Are they going to have a representative there when you open the box and inspect the contects? I don't get how the inheritance tax can be enforced on a safe deposit box and its contents as pp suggests?

We don't have an inheritance tax in this country. We have an estate tax.

what is the difference between inheritance tax and estate tax?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You don't have to but the bank must report that you have a safety deposit box to the IRS. This is a relatively new rule so beware.

What purpose does this serve? The bank reporting the box to the IRS... Is it so that the IRS can come after what's in the box after you die?

Or beforehand if they suspect that you are up to something or underreporting (or you're just an unlucky randomized audit).

and needless to say: so that the IRS can make sure to collect the inheritance tax from your inheritors, plus fines and interest, if they "forget" to pay the tax.

So for posessions like jewelry, for example. How can the IRS make sure you pay an inheritance tax on this? Are they going to have a representative there when you open the box and inspect the contects? I don't get how the inheritance tax can be enforced on a safe deposit box and its contents as pp suggests?

We don't have an inheritance tax in this country. We have an estate tax.

We have both: We have a federal estate tax and some states have inheritance tax.

[Anonymous]

The estate pays the tax before anyone inherits anything.

Heirs inherit exactly what they're entitled to -- the value of the estate after taxes and any expenses of the deceased.

Since that all clocks in at $5 Million, your heirs will still be ok. Promise.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You don't have to but the bank must report that you have a safety deposit box to the IRS. This is a relatively new rule so beware.

What purpose does this serve? The bank reporting the box to the IRS... Is it so that the IRS can come after what's in the box after you die?

Or beforehand if they suspect that you are up to something or underreporting (or you're just an unlucky randomized audit).

and needless to say: so that the IRS can make sure to collect the inheritance tax from your inheritors, plus fines and interest, if they "forget" to pay the tax.

So for posessions like jewelry, for example. How can the IRS make sure you pay an inheritance tax on this? Are they going to have a representative there when you open the box and inspect the contects? I don't get how the inheritance tax can be enforced on a safe deposit box and its contents as pp suggests?

Speak to a tax expert. I *think* that the inheritor will not have to pay estate tax but they may have to pay long-term capital gains.

[Anonymous]

I put my mom on our safe deposit box and she and i are signatories and have keys to one another's boxes. Works well even if you live in different towns.

[Anonymous]

Anonymous wrote:The estate pays the tax before anyone inherits anything.

Heirs inherit exactly what they're entitled to -- the value of the estate after taxes and any expenses of the deceased.

Since that all clocks in at $5 Million, your heirs will still be ok. Promise.

That only applies if you have some sort of trust established. Otherwise, taxes on inherited money will go onto your inheritors personal income tax.

[Anonymous]

Lots of bad info here.

Estate tax is due on estates worth over $5 million. Whatever is in the box would be included in the estate.

If you want heirs to have immediate access to $ and not have it pass through estate, make a checking account POD (payable on death) to your heir.

Make sure heirs know about, and have legal access to the box. I was executor for my dad's estate, and I was not able to take any contents from his safe deposit box. I have to wait for it to be forfeited from the bank for non-payment (many years) and then it goes to Florida, where I can petition to get the belongings. It only had birth certificates in it, but they have sentimental value.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You don't have to but the bank must report that you have a safety deposit box to the IRS. This is a relatively new rule so beware.

What purpose does this serve? The bank reporting the box to the IRS... Is it so that the IRS can come after what's in the box after you die?

Or beforehand if they suspect that you are up to something or underreporting (or you're just an unlucky randomized audit).

and needless to say: so that the IRS can make sure to collect the inheritance tax from your inheritors, plus fines and interest, if they "forget" to pay the tax.

So for posessions like jewelry, for example. How can the IRS make sure you pay an inheritance tax on this? Are they going to have a representative there when you open the box and inspect the contects? I don't get how the inheritance tax can be enforced on a safe deposit box and its contents as pp suggests?

We don't have an inheritance tax in this country. We have an estate tax.

what is the difference between inheritance tax and estate tax?

Who pays it.

An inheritance tax is paid by each individual heir based on their individual tax rates.

An estate tax is paid by the decedent before things are distributed. The first $10 million of a couple's estate is exempt from this tax.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You don't have to but the bank must report that you have a safety deposit box to the IRS. This is a relatively new rule so beware.

What purpose does this serve? The bank reporting the box to the IRS... Is it so that the IRS can come after what's in the box after you die?

Or beforehand if they suspect that you are up to something or underreporting (or you're just an unlucky randomized audit).

and needless to say: so that the IRS can make sure to collect the inheritance tax from your inheritors, plus fines and interest, if they "forget" to pay the tax.

So for posessions like jewelry, for example. How can the IRS make sure you pay an inheritance tax on this? Are they going to have a representative there when you open the box and inspect the contects? I don't get how the inheritance tax can be enforced on a safe deposit box and its contents as pp suggests?

Speak to a tax expert. I *think* that the inheritor will not have to pay estate tax but they may have to pay long-term capital gains.

Nooooooo. There still exists a stepped-up basis for inherited assets. The estate itself pays any tax due. There are no capital gains taxes involved.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You don't have to but the bank must report that you have a safety deposit box to the IRS. This is a relatively new rule so beware.

What purpose does this serve? The bank reporting the box to the IRS... Is it so that the IRS can come after what's in the box after you die?

Or beforehand if they suspect that you are up to something or underreporting (or you're just an unlucky randomized audit).

and needless to say: so that the IRS can make sure to collect the inheritance tax from your inheritors, plus fines and interest, if they "forget" to pay the tax.

So for posessions like jewelry, for example. How can the IRS make sure you pay an inheritance tax on this? Are they going to have a representative there when you open the box and inspect the contects? I don't get how the inheritance tax can be enforced on a safe deposit box and its contents as pp suggests?

Speak to a tax expert. I *think* that the inheritor will not have to pay estate tax but they may have to pay long-term capital gains.

Nooooooo. There still exists a stepped-up basis for inherited assets. The estate itself pays any tax due. There are no capital gains taxes involved.

"If your sale [of inherited assets] will result in a profit, it automatically qualifies for the maximum rate on long-term capital gains, regardless of how long the inherited shares were actually owned by the decedent or you. If you sell at a loss, it will be a long-term capital loss"

http://www.smartmoney.com/taxes/income/taxes-on-investments-received-as-a-gift-or-inheritance-9533/