Q: I am a sole proprietor. Must I have a tax identification number?
A: The sole proprietor is the only classification of business entity that does not need a tax ID number. However, if the sole proprietor has employees or a pension plan he or she must report, it must have a taxpayer identification number. In the case of the proprietor having no employees or reportable pension obligation, the proprietor’s number is his or her social security number.
Q: What is included in an estate for estate tax purposes?
A: All the assets the decedent owned are included in the value of the estate. The value is calculated as the sum total of the fair market value of assets which are includible. The total value of all the assets are what is referred to as the gross estate. The gross estate for IRS purposes can include probate property as well as non-probate property.
Q: Is my business worth more or less this year due to the dampened economy?
A: Generally, most businesses will see a slight dip in their value this year due to the slow down in the economy. The silver lining to this is that the depressed value allows business owners to transfer more stock to their successors on a tax free basis, as opposed to when the economy and their business value is inflated. This fact makes 2012 a great time to begin estate planning and business succession planning.
By: Basi & Basi at the Center for Financial, Legal and Tax Planning for Transworld M&A Advisors