You send me a lot of e-mail, most of it wise and witty. But not all.

SCARIEST EMAILS OF THE MONTH

Runner up: “hi how are you? i m a student physic university.what is your job?what are you like?what about you write me . thank you goodbye taylan”

Winner: “Kindly do not reprint this inquiry as I would like it to remain confidential. My company [a well-known high-sales-fee mutual fund company], is co-sponsoring a research study called [something demographic] and we would like to have a financial writer or journalist ghost write two Wall Street Journal op-ed pieces on behalf of our senior executives that incorporate some of the more interesting results of the study. Would you be willing to undertake this project? This is a well-paid ghost writing assignment.”

And while I’m on the topic of scary missives . . .

SCARIEST SNAIL MAIL OF THE MONTH

“Dear Mr. Tobias, It is the greatest privilege of my tenure as Chairman of the Republican Party to inform you that you’ve been selected to receive the Republican National Committee’s highest honor. Mr. Tobias, you have distinguished yourself as one of our strongest leaders by proudly standing firm in your support of our Republican Agenda, never wavering in your principles. It is therefore my distinct privilege to present you with your 2000 President’s Club Inaugural Platinum Card on behalf of every Republican leader nationwide . . . an exclusive honor offered only to an elite few selected for their specific service to the Republican Party.”

WAS OUR 99.6% “WORST CASE” TAX BRACKET ON AN INHERITED IRA CORRECT?

Last Friday’s column about Inheriting an IRA posited a worst case where, between estate tax and income tax on the withdrawals, a $1 million IRA could be subjected to $996,000 in taxes, leaving the grieving heirs a mere $4,000. A couple of you kindly pointed out that Less failed to take into account a deduction that would make this horrifying worst case slightly less horrifying. Less replies:

“Yes, I ignored the possible estate tax deduction for income in respect of a decedent — which will amuse my students, since I teach that deduction in class. But since we were trying to come up with the worst-case scenario, it is worth noting that 80% of the estate tax deduction will be lost if the taxpayer’s Adjusted Gross Income is high enough. Thus, only $120,000 of the $600,000 estate tax will be deductible in the worst case, resulting in a reduction of the income tax of only $120,000 x 39.6% = $47,520. So the worst case scenario from a federal point of view is not $996,000 in taxes, as I suggested, but “only” $948,480. Yet that doesn’t include state taxes, so the $996,000 may not be far off, in the worst case, after all!”

 

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