Family Office Definition: Income Tax
Income Tax definition: Income taxes are assessed on estates producing annual income over the basic income exclusion amount, similar to individuals. The executor of the estate files an income tax return, as well as an estate tax return. While income taxes are not owed on gifts or inheritances, the recipient is responsible for income taxes on distributions from trusts or income produced from gifted property or inherited property. Proceeds from life insurance policies are not taxable income for the beneficiary.
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