jinnix

Here is what I think, assume portfolio does not grow.

If we sell $1mil in revocable trust, then sell all assets on date of death
Capital gain tax on sale: (1mil - 100K) * 20% = $180K <-- all cash, no more estate tax
Estate tax on remaining: 1mil * 20% = $200K <-- no capital gain
Irrevocable trust tax: (2mil - 200K) * 20% = $360K

Assume we sell $1mil in irrevocable trust, then sell all assets on date of death
Capital gain tax on sale: (1mil - 100K) * 20% = $180K
Capital gain tax on remaining sale: (1mil - 100K) * 20% = $180K
Estate tax on revocable trust: 2mil * 20% = $400K <-- no capital gain

If you look at the total tax paid, revocable trust is lower by the capital gain basis of 20K ($100K * 20%). So revocable trust minimizes total taxes.

jinnix

yes, taking in Los Angeles. what about you?