bequest n : (law) a gift of personal property by will [syn: legacy]
EtymologyFrom bequeste, past participle of bequethen
- The transfer of property upon the owner's death according to the will of the deceased.
A bequest is the act of giving property by will. Strictly, "bequest" is used of personal property, and "devise" of real property. It means the same thing as bequeath in legal terminology.
(From Old English becwethan, to declare or express in words; cf. "quoth")
Interpreting bequestsPart of the process of probate involves interpreting the instructions in a will. It means the same thing as bequeath in legal terminology.
Some wordings that define the scope of a bequest have specific interpretations. "All the estate I own" would involve all of the decedent's possessions at the moment of death.
A conditional bequest is a bequest which will only be granted if a particular event has occurred by the time of its operation. For example, a testator might write in their will that "Mary will receive the house held in trust if she is married" or "...if she has children," etc.
An executory bequest is a bequest which will be granted when a particular event occurs in the future, if it happens. For example, a testator might write in their will that "Mary will receive the house held in trust set when she marries" or "when she has children," etc.
In microeconomics theorists have engaged the issue of bequest from the perspective of consumption theory, in which they seek to explain the phenomenon in terms of a bequest motive.
For the Recipient
In order to calculate a taxpayer's income tax obligation, the gross income of the tax payer must be determined. Under Section 61 of the Internal Revenue Code gross income is "all income from whatever source derived". On its face, the receipt of a bequest would seemingly fall within gross income and thus be subject to tax. However, in other sections of the code, exceptions are made for a variety of things that do not need to be included in gross income. Section 102(a) of the Code makes an exception for bequests stating that "Gross income does not include the value of property acquired by gift, bequest, or inheritance." In general this means that the value or amount of the bequest does not need to be included in a taxpayer's gross income. This rule is not exclusive, however, and there are some exceptions under Section 102(b) of the code where the amount of value must be included.
For the Donor
One reason that the recipient of a bequest is usually not taxed on the bequest is because the donor may be taxed on it. Donors of bequests may be taxed in through other mechanisms such as federal wealth transfer taxes. Wealth Transfer taxes, however, are usually only imposed against the very wealthy.
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