1. David Collins died during the current year. The personal representative of David's estate reviewed the following assets: Stocks in David's name only: 2,000,000 Investment property in a trust that David has the right to revoke: 1,500,000 Primary home owned jointly with his wife (wife did not contribute to the purchase): 1,000,000 Insurance policy owned / insuring David with the proceeds payable to his daughter: 800,000 Vacation home owned jointly with his son (son did not contribute to the purchase): 500,000 Cash placed in an irrevocable trust by David 8 years ago with David's friend as trustee: 600,000 What is the value of David's gross estate for estate tax purposes? a. $3,500,000 b. $4,250,000 c. $5,300,000 d. $6,400,000

1. David Collins died during the current year. The personal representative of David's estate reviewed the following assets: Stocks in David's name only: 2,000,000 Investment property in a trust that David has the right to revoke: 1,500,000 Primary home owned jointly with his wife (wife did not contribute to the purchase): 1,000,000 Insurance policy owned / insuring David with the proceeds payable to his daughter: 800,000 Vacation home owned jointly with his son (son did not contribute to the purchase): 500,000 Cash placed in an irrevocable trust by David 8 years ago with David's friend as trustee: 600,000 What is the value of David's gross estate for estate tax purposes? a. $3,500,000 b. $4,250,000 c. $5,300,000 d. $6,400,000

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter27: The Federal Gift And Estate Taxes

Section: Chapter Questions

Problem 8BCRQ

See similar textbooks

Similar questions

David Collins died during the current year. The personal representative of David’s estate reviewed the following assets: 1) Stocks in David’s name only: $ 2,000,0002) Investment property in a trust that David has the right to revoke: $1,500,0003) Primary home owned jointly with his wife (wife did not contribute to the purchase): $1,000,0004) Insurance policy owned/insuring David with the proceeds payable to his daughter: $800,0005) Vacation home owned jointly with his son (son did not contribute to the purchase): $500,0006) Cash placed in an irrevocable trust by David 8 years ago with David’s friend as trustee: $600,000 What is the value of David’s gross estate for estate tax purposes?
At the time of her death on September 4, Alicia held the following assets: Fair Market Value Bonds of Emerald Tool Corporation $900,000 Stock in Drab Corporation 1,100,000 Insurance policy (face amount of $400,000) on the life of her brother, Mitch 80,000* Roth IRAs $300,000 *Cash surrender value. Alicia also held a lifetime income interest in a trust (fair market value of trust assets $2,000,000) created by her late spouse Bert. (The executor of Bert's estate did not make a QTIP election.) In October, Alicia's estate received an interest payment of $11,500 ($6,000 accrued before September 4) paid by Emerald and a cash dividend of $9,000 from Drab. The Drab dividend was declared on August 19 and was payable to date of record shareholders on September 5. Although Mitch initially survives Alicia, she is the designated beneficiary of the insurance policy. The IRAs are distributed to Alicia's children. Mitch is killed by a rock slide while mountain climbing in…
Carl made the following transfers during the current year. What are Carl’s taxable gifts for the current year? 1.Transferred $900,000 in cash and securities to a revocable trust, life estate to himself and remainder interest to his three adult children by a former wife. 2.In consideration of their upcoming marriage, gave Maria a $90,000 convertible. 3.Purchased a $100,000 certificate of deposit listing title as “Carl, payable on proof of death to Maria.” 4.Established a joint checking account with his now-wife, Maria, in December of the current year with $30,000 of funds he inherited from his parents. In January of the following year, Maria withdrew $18,000 of the funds. 5.Purchased for $80,000 a paid-up insurance policy on his life (maturity value of $500,000). Carl designated Maria as the beneficiary. 6.Paid $23,400 to a college for his niece Mindy’s tuition and $11,000 for her room and board. Mindy is not Carl’s dependent. 7.Gave his aunt Betty $52,000 for her heart bypass…
Carl made the following transfers during the current year. What are Carl’s taxable gifts for the current year? • Transferred $900,000 in cash and securities to a revocable trust, life estate to himself and remainder interest to his three adult children by a former wife. • In consideration of their upcoming marriage, gave Maria a $90,000 convertible. • Purchased a $100,000 certificate of deposit listing title as “Carl, payable on proof of death to Maria.” • Established a joint checking account with his now-wife, Maria, in December of the current year with $30,000 of funds he inherited from his parents. In January of the following year, Maria withdrew $18,000 of the funds. • Purchased for $80,000 a paid-up insurance policy on his life (maturity value of $500,000). Carl designated Maria as the beneficiary. • Paid $23,400 to a college for his niece Mindy’s tuition and $11,000 for her room and board. Mindy is not Carl’s dependent. • Gave his aunt Betty $52,000 for her heart bypass…
At the time of her death on September 4, Alicia held the following assets: Bonds of Emerald Tool Corporation Stock in Drab Corporation Insurance policy (face amount of $1,456,000) on the life of her brother, Mitch Traditional IRAs Cash surrender value. Fair Market Value The amount included in Alicia's gross estate for these items is $ $3,640,000 4,368,000 * 291,200 1,092,000 Alicia also held a lifetime income interest in a trust (fair market value of trust assets $5,500,000) created by her late spouse Bert. (The executor of Bert's estate had made a QTIP election.) In October, Alicia's estate received an interest payment of $15,000 ($7,500 accrued before September 4) paid by Emerald and a cash dividend of $10,550 from Drab. The Drab dividend was declared on August 19 and was payable to date of record shareholders on September 3. Although Mitch survives Alicia, she is the designated beneficiary of the insurance policy. The IRAs are distributed to Alicia's children.
Charles Kamp, a divorced person, died in February of the current year with an estate consisting of assets valued at $7,008,000 and liabilities of $380,000. Charles’s will contained the following provisions:a. Robert Sullivan would serve as executor of the estate and trustee for the Kamp Children Trust.b. Timberland with a market value of $560,000 would be placed in a charitable remainder trust. The income from the trust would accrue to the benefit of his sister Marsha Kamp Rodriquez. Income would be reduced by the depletion charge associated with the number of board feet of lumber harvested.c. Securities with a value of $25,000 would be given to the Milwaukee Art Museum, recognized as a charitable organization.d. Securities with a value of $600,000 would be given to his married daughter, Maria Kamp Wilson.e. Each of his three best hunting friends would be paid $200,000 from the proceeds of the sale of Charles’s investment in hunting land in Alaska. The hunting land was valued at…
Willie Walker, a widower, died on February 1, 20X8. He had no living relatives. The following selected events occurred after Willie’s death: Mary Paxton, the executrix named in the will, filed an inventory of the estate assets consisting of: Cash $20,000 Owl Corporation 12% bonds, paying interest semiannually on December 1, and June 1 (market value excluding interest, at date of death, $91,000) face value 70,000 Eagle Corporation common stock 38,000 Eagle Corporation cash dividend declared January 2, 20X8 payable February 15, 20X8, to holders of record as of January 25, 20X8 (state law stipulates that the date of record is the governing date) 2,000 A pair of snowmobiles with trailer…
b. $ d. $0 7. David Collins died during the current year. The personal representative of David's estate reviewed the following assets. Stocks in David's name only Investment property in a trust that David has the right to revoke Primary home owned jointly with his wife (wife did not contribute to the purchase) Insurance policy owned by and insuring David with the proceeds payable to his daughter Vacation home owned jointly with his son (son did not contribute to the purchase) Cash placed in an irrevocable trust by David eight years ago with David's friend as trustee What is the value of David's gross estate for estate tax purposes? a. $3,500,000 b. $4,250,000 c. $5,300,000 d. $6,400,000 $ 2,000,000 1,500,000 1,000,000 800,000 500,000 600,000
22. Troy and Anne have the following in their combined estate. Assume that in 2008, Troy to set up the standard A/B marital deduction/bypass trust arrangement for himself. If Troy dies in 2021, which of the following would be correct (Assume No Deductible Expenses or Prior Gifts)? Troy separate property Anne separate property Community property $16,900,000 $700,000 $1,600,000 A Trust Receives B Trust Receives $ 6,000,000 $11,700,000 $ - 0- $13,074,200 А. В. $11,700,000 $ 6,000,000 $17,700,000 $4,625,800 C. D. In 2021, Richard gave gifts of $30,000 each to his church, his wife, his son, and his mother. Richard also created and funded a QTIP trust for his wife with $200,000 in which his daughter was to receive the remainder interest upon the death of the wife. A QTIP election will be made on Richard's gift tax return. What is the total value of the annual exclusions used by Richard? 23. А. $30,000 $45,000 $60,000 $90,000 None of the above. В. C. D. Е. 24. All the following items will be…
The Bell Family Trust (Bell Trust) was established by Mr. Bell for the purposes of the education and wellbeing of his family. In the last financial year Emma (aged 37) as Trustee made distributions from the trust account to herself, John (aged 20) and Edward (aged 17) under her discretion as trustee. Emma reports to you, her tax advisor, the following information: Distributions Emma $145,000 John $105,000 Edward $80,000 Retained in trust $10,000 Additional information: Emma works as a Social Media consultant and also had $150,000 in salary and $12,500 in work related expenses. John is a fulltime university student with no other income. Edward attends a private boarding school. $75,000 of his trust distribution pays his school fees. Explain the tax obligations for Emma, John, Edward and the undistributed income retained in the trust account?
Mr. James Santiago created two (2) trusts designating Atty. Mars Bonafe and the Philippine Trust Company as trustees. The common beneficiary of the two (2) trusts was his son, James II, married, and with two (2) qualified dependent children. The following data were made available for the year 2019: Trust No.1 Trust No.2Gross income P 600,000 P 700,000Business expenses 300,000 400,000Income distribution to beneficiary 100,000 200,000 James Santiago IIGross income P 800,000Business expenses 250,000Income distribution received, gross of 15%creditable withholding…
The will of Josh O’Brien has the following stipulations:Antique collection goes to Ilsa Lunn.All money in the First Savings Bank goes to Richard Blaine.Cash of $9,000 goes to Nelson Tucker.All remaining assets are put into a trust fund with the income going to Lucy Van Jones. At her death, the principal is to be conveyed to Howard Amadeus.Identify the following:a. Remaindermanb. Trustorc. Demonstrative legacyd. General legacye. Specific legacyf. Life tenantg. Testator