Question. Your client, who is in poor health, is considering selling her business to her daughter using a 10-year installment sale. The client has asked you about the estate tax implications of the outstanding installment note payments should she die within the 10-year period. What is your response to your client's inquiry regarding the estate tax implications? A) The fair market value of the business will be included in her gross estate because the installment sale term will not be completed. B) The outstanding installment payments will be cancelled upon her death and excluded from her gross estate if she does not outlive the 10-year period. C) The present worth of any outstanding installment payments must be included in her gross estate because the installment term was not completed. D) The outstanding installment payments will be excluded from her gross estate because she did not outlive the 10-year installment period.
Question.
Your client, who is in poor health, is considering selling her business to her daughter using a 10-year installment sale. The client has asked you about the estate tax implications of the outstanding installment note payments should she die within the 10-year period. What is your response to your client's inquiry regarding the estate tax implications?
A) The fair market value of the business will be included in her gross estate because the installment sale term will not be completed.
B) The outstanding installment payments will be cancelled upon her death and excluded from her gross estate if she does not outlive the 10-year period.
C) The present worth of any outstanding installment payments must be included in her gross estate because the installment term was not completed.
D) The outstanding installment payments will be excluded from her gross estate because she did not outlive the 10-year installment period.
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