Now that jimrac has given an example, I understand the point he is trying to make. However, there's a couple of things he doesn't consider. IF you took an inheritance as cash, and IF you kept it as cash, then yes, you could spend it down without incurring income tax. However, if you take that money and invest it, you will pay taxes upon your gains. But you do get that Âstep up basis jimrac is depending upon. But of course, if you allow the account to compound over time without spending principal, you run the risk of incurring estate taxes for your own heirs. You could also buy an annuity, which has some limited tax advantages. Conversely, inheriting an IRA is different. You do not have to cash out an inherited IRA, in fact you should always roll it over into an FBO account in your and the deceasedÂs names. IF the owner was taking distributions, heirs also have to take distributions  but they can take the minimum distribution (Required Minimum Distribution, or RMD) which at young ages is a very modest amount indeed. If the owner was not taking distributions, the IRA can be left intact until age 70-1/2 for the heir. And in the case of an inherited Roth IRA, there is NEVER any income tax, for owner or heirs. Because the gains in the Roth compound tax-free, they win hands-down over any taxable account. The biggest issue is the salary restrictions (higher wage earners are barred from contributing to a Roth, although in 2010 only they can convert any amount they wish to pay income taxes on now) and the low annual contribution amount (although I expect Congress will probably increase those at some point). As my ex-boss, a respected CFP, used to say, "Don't let the tax tail wag the dog!" Tax planning should be looked at in a holistic fashion. Somebody's going to pay taxes, it just depends on who that is, and how much. Frankly, if you had a $1M mutual fund account - and I know quite a few people who do - if you were that concerned about your heirs paying income taxes, you'd set up an ILIT (Irrevocable Life Insurance Trust) for your immediate heirs, and a Bypass or QTIP trust for the future generation heirs.

I've had three already in the past 6 weeks and I've done very well. I'm a plantlady (interiors, businesses, residences etc) and with this economy we have lost a few accounts and some plants were coming back to the office from the leases (most accounts own their plants)and we don't have any room for them there. My boss asked me if I wanted them as he was going to throw them out. I jumped at it and took them home. I had already been giving plants to all of my neighbors and freecycle as I get them all the time when we replace plants but here I had a few dozen 5-8 foot plants so I had my roommate make up a sandwich board type sign with signs and arrows on both sides so peeps could see it coming or going down our main street which is just a few houses down the block. WOW! We had people coming by all day and I sold almost every plant. My roomate was amazed at the traffic. I told him to look for tools he didn't want (he had tons of stuff as he's a special effects guy in the studios) and we'd add another sign to our "plants for sale" sign on the sandwich board and see what happens. Guys like tools and Holy Camoly! We were sooooo busy. I had more plants to sell and we did really well that weekend. The third time it was a mix of stuff, plants and tools. I made close to $1000.00 and Bill made in the area of $2500.00. Not too bad for three days work and we got rid of a lot of stuff just sitting in the garage too. The second time we had the sale I had a big pot of chicken and rice soup on the stove and quite a few peeps were shopping while holding a hot mug of soup :-) It was chilly and damp that day. We had some fun, met some neighbors and city council members and made a few bucks. Patti2

I agree, if they are going to take the time to thank someone they should do it right. May as well thank the dog if they don't care to be polite. We recently ordered and bought a new vehicle. The rebates were in my name and I kept telling the dealer that we had a new rebate coming and check it out. He couldn't find it. Yea, you know why. When I told him that I like to have credit and good credit at that, I put big items in my name. Heck I do most of the road work when buying for this home, why not have it in my name. It's not 1930 anymore. If something were to happen to my dh, my credit would be already standing in good shape. There are plenty of places that would like to 'Thank You' and everyone deserves (and likes) a simple thank you. I wouldn't be upset, I'd just tell them why I've stopped donating and give to the agencies that were on top of things. What really makes me wonder is why o why are we on another list because of a funeral donation? A distant neighbor, my dh knew and I didn't, passed away. My dh went to her funeral and gave a nice donation which went to their "cause". Now this 'cause' got a hold of his name AND ADDRESS. No matter how we try to curb the junk, it finds us. ugg. sorry Hilltop, got off the subject..

If you are required to take a Min. Required Distribution from your retirement account(s) at 70 & 1/2, you can instruct some or all of your distribution that year go directly to a IRS approved charity & you dont pay income tax on it. Since we dont itemize, this worked well for us two tax years ago. I just had my IRA Trustee send a check directly to my chosen charity, and the balance to us. Last year, because of The Great Recession, taking a MRD was optional. I doubt that Congress will repeat this option for 2010 though.