Hi again, everyone, Update on the above info, offered by my friend the accountant whom I first met at the investment group about 5 years or more ago. The guy who retired last year, without a pension, and who now borrows at about 6% (interest deductible when used for investment) and puts it out to earn about 12% (much of current return at low tax rate, some of it deferred, to be taxed at low rate when withdrawn). He says that the amount of current income that that can be obtained free of tax is closer to $50,000.00. Same provisos as outlined above - with possibility of bumping up the amount that is received free of tax given some of the situations as mentioned. Sorry that the situation applies only to Canadian residents, folks. Good wishes to you and yours. ole joyful P.S. We had a visitor/new member at our investment group last week, who said that she felt rather at sea, among such skilled investors. We told her not to feel bad - that in the investment game, there are no stupid questions. That she should ask any of us to explain various terms or situations that were unfamiliar to her. Each of us learns as we go, a step at a time. Compensation usually increases commensurate with increased knowledge! o j

sconti- There are many things you can factor in to minimize your capital gain on the house you sold if the profit exceeds the $500K exemption for a married couple. Start by taking a look at the IRS publication link below. Then, when you think you understand it, invest an hour with a CPA to make sure you've got everything you've entitled to. As far as the house you just bought, the deductions are going to be interest and property taxes. Here is a link that might be useful: Selling your home.

Debr, Federal (and maybe even state) INCOME Tax will need to be paid by the heirs if there are any tax deferred assets (like IRA's or NQ Annuities). This could have been factored in by the attorney. There also may be some probate expenses on top of the taxes which may push that total estate settlement cost to more than his estimated one-third the estate. Since you said no planning had been done I'd bet the estate would go through probate; unless everything was IRA or annuity with a designated beneficiary. This may save on the administrative costs, but brings us back to the Income tax that would be due. Like davidandkasie said, it really depends a lot on the individual situation and there isn't enough information here. devorah is correct - FEDERAL ESTATE TAX exclusion for 2006 is $2mil - but this has nothing to do with the income taxes or possible administrative costs on settling the estate. Good luck.

Here in Allegheny county, in Western Pennsylvania, the house and school taxes used to be pro-rated on our home at %25 percent of market value! Then, when the county fell on hard times, they paid a judge to change the taxing formula from 25 percent to 100 percent of assessed valuation! (market value) This way, they could set a value and we could appeal, with much rigamarole, time spent at the county courthouse, and paying exorbitant parking rates downtown, to file an appeal, along with attorney fees, and other costs! This usually resulted in a slight reduction, which had to be gone thru every year! I'm a disabled veteran, living on SS and my disability check. Guess what that did to our life! And, i get no discount for that either! And then, to add insult to injury, the big shots decided to re-assess every year or so! Our home taxes keep going higher every year and we'll soon be on our "uppers", as the old saying goes! Twice a month there is a long list of poor folks homes being sold by the county sheriff for back taxes! (like 4 1/2 pages) There are lots of old folks living around here, old mill workers, all kinds of folks living out their last days, unable to move anywhere else, being hauled out to the street in the coldest weather, and left out there with no where to go! The Governer says he's going to change all that, but, he has money and time for everything else, and the sales go on! by: Rustyj