D creates a trust to last for 10 years, with income to D for the 10 year period and at the end of 10 years, remainder to X or X's estate. In Year 8 the trust is worth $ 5,000,000 and D's life estate is worth $ 2,000,000. In that year D sells his life estate to the trust for its $ 2,000,000 actuarial value and dies 2 years later. Assuming the trust had a value of $ 6,000,000 at D's death, the amount of trust property includible in D's gross estate, if any, is:
D creates a trust to last for 10 years, with income to D for the 10 year period and at the end of 10 years, remainder to X or X's estate. In Year 8 the trust is worth $ 5,000,000 and D's life estate is worth $ 2,000,000. In that year D sells his life estate to the trust for its $ 2,000,000 actuarial value and dies 2 years later. Assuming the trust had a value of $ 6,000,000 at D's death, the amount of trust property includible in D's gross estate, if any, is:
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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D creates a trust to last for 10 years, with income to D for the 10 year period and at the end of 10 years, remainder to X or X's estate. In Year 8 the trust is worth $ 5,000,000 and D's life estate is worth $ 2,000,000. In that year D sells his life estate to the trust for its $ 2,000,000 actuarial value and dies 2 years later. Assuming the trust had a value of $ 6,000,000 at D's death, the amount of trust property includible in D's gross estate, if any, is:
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