Research Paper on:
Income Taxation of Trusts and Estates

Unformatted Sample Text from the Research Paper:
tax, he did explain that he would continue to press Congress to permanently end the estate taxes ("The Bush," 2003). The estate tax is presently scheduled to be phased out  completely by 2010, but that is true only for a year; unless Congress passes new laws sometime in 2003, the federal tax will be reinstated in 2011 (2003). People would  only be allowed to leave their heirs $1 million tax-free dollars at that time (2003). While this is problematic, it is also something that does not affect the average person.  The federal death tax only has an effect on a small number of estates and even if Congress is able to do away with it, that would mean that only  large estates would not be taxed by the federal government, but such estates may be taxed at the state level ("The Bush," 2003). While the taxation of estates is something  that is much discussed, it is uncertain what will happen in the future. What is certain is that there are taxes on trusts and estates as well as the income  derived from them. First, it is important to note the value of trusts. Markley (1996) explains that the days of using a will for large estates are not over, but  some experts do say that creating a trust for the long haul can be the better option. As people who have considerable assets learn of the liabilities that large sums  of money do bring once they have passed away, more people are turning to trusts for protection (1996). Many people seek protection from federal estate taxes, which alone are able  to carve out as much as 55 % (1996, p.5B) of an estates value. As the value of an estate grows, both federal estate taxes and state death taxes do