managed by a rep at one of the large brokerage firms. The rep suggested that we may want to pull out up to $14k per beneficiary per year (x3 = $42k) to avoid inheritance taxes. He suggested that we might do this prior to the end of 2015.=====>Not to avoid inheritance taxes but to avoid filing IRS form 709; If they gave gifts to each benefciiary in 2014-15 totalling more than $14K , annual gift tax exclusion amt, they must file Form 709.
Would we incur other taxes such as cap gains? >No I do not think so; as a recipient of the gift (not exceeding $14K), you do not need to pay any tax on the gift of $14K form 2014-15.
Would we incur cap gains both pre asset dispersal and post asset dispersal?=====>I think so;when the FMV exceeds the adjusted basis of the assets, then you can be subejct to LTCG taxes as I assume the assets are NOT biz use assets; Long-term capital gains are taxed at long-term capital gains rates, which is usually less than ordinary tax rates. The long-term capital gains tax rate is either zero % I fyour tax ratre is lower than 25%, and the rate is 15% if your marginal tax rate is higher than 15% or the rate is 20% if your tax ratre is 39.6% bracket.
If so, what is the inheritance rate versus cap gains? Trying to figure out if it is a good idea to wait from a tax perspective.==========>For federal level it is estate tax NOT inheritance tax; The estate tax in the United States is a tax on the transfer of the estate of a deceased person while when you inherit property from someone who lived in one of the US states with inheritance taxes I guess not all of the 50 states carry inheritance taxes,, you may end up paying some of your inheritance in taxes. So , you need to check it with the dept of reveneue of your state; Most estates don't owe federal estate or gift tax, because you can give away or leave substantial amounts of property tax-free.
The federal estate and gift taxes are really one tax, called the unified gift and estate tax. For deaths in 2015, you can leave or give away up to $5.43 M, total, before you need to pay tax. Tax liability isn't assessed until death, unless you make $5.43 M in taxable gifts (very unusual) during your lifetime. So most of the US citizens are NOT subject to gift/estate taxes