What amount, if any, does Bob’s estate exceed the $11,000,000 exclusion amount?
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2. Bob died in Year 3. His gross estate consisted of assets with a fair market value of $13,500,000. In his will, Bob leaves $1,000,000 to his wife, $500,000 to his only daughter, and $250,000 to his favorite charity. Prior to Bob’s death, he was involved in a lawsuit when one of his tenants slipped and fell at one of the rental properties owned by Bob. After his death, the personal representative settled the lawsuit for $750,000. The expenses to close Bob’s estate were $50,000.
In Year 3, the federal estate exclusion amount is $11,000,000. What amount, if any, does Bob’s estate exceed the $11,000,000 exclusion amount?
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- Andy, 68, has a gross estate currently valued at $2,500,000 that consists primarily of highly appreciated growth securities. Within the last six months, Andy transferred $500,000 worth of these securities to his wife, Harriet. His cost in these securities was $200,000. Harriet recently died. The fair market value of the transferred securities at the time of her death was $500,000. The securities passed to Andy under the terms of Harriet's will. Which one of the following is an income tax implication of the transfer of stock? A) Andy must recognize $300,000 in capital gain on the stock as of Harriet's death. B) If Andy sells the stock he received from Harriet immediately after her death, his gain, if any, will be deemed to be short-term capital gain. C) Andy's basis in the stock is $200,000. D) Andy's basis in the stock is $500,000.Last year Robert transferred a life insurance policy worth $470,000 to an irrevocable trust with directions to distribute the corpus of the trust to a grandson, Danny, upon graduation from college, or to Danny's estate upon death. Robert paid $41,000 of gift tax on the transfer of the policy. Early this year, Robert died, and the insurance company paid $4.2 million to the trust. What amount, if any, is included in Robert's gross estate? Note: Enter your answers in dollars, not millions of dollars. Amount to be included in Robert's gross estateMorgan, a widow, recently passed away. The value of her assets at the time of death was $10,109,000. The cost of her funeral was $7,955, while estate administrative costs totaled $49,049. As stipulated in her willI, she left $950,378 to charities. Based on this information answer the following questions: a. Determine the value of Morgan's gross estate. b. Calculate the value of her taxable estate. c. What is her gift-adjusted taxable estate value? d. Assuming she died in 2017, how much of her estate would be subject to taxation? e. Calculate the estate tax liability.
- Paul, a single dad with three children aged 21, 11 and 9 died recently. His late wife, Winifred died giving birth to their third child. Paul did not have a will. His estate comprises the following assets: Family home: $330,000 Superannuation: $115,000 Cash: $15,000 Family car: $20,000 Art work: $8,000 Describe some of the issues associated with Paul’s intestacy. Outline some of the estate planning strategies that Paul could have considered if he had prepared a will. What are the advantages of having a valid will in place?Jean died in a common-law state in 2022 and was survived by her husband, Loren, and three adult children. Jean's gross estate, all of which was owned solely in her name, was composed of the following assets and date of death fair market values: Assets Values Common stock $ 4,900,000 Residence 750,000 Personal property 60,000 IRAs 3,450,000 Hummel figurines 175,000 Total Assets $ 9,335,000 Jean's only liabilities, together with their date of death balance, were as follows: Liabilities Balance Mortgage on residence $175,000 Car loan 8,000 Total $183,000 The following is a list of all of the gratuitous transfers that Jean made during her lifetime: 2000: Placed the common stock listed above in an irrevocable trust in which she retained the right to a 5% distribution of the trust account revalued annually for 25 years with the remainder to her children at her death; the date of gift fair market value of the stock was $190,000; the value of Jean's…During her lifetime, Elaine made several property transfers, including the following: a) The $11,0000 in cash for each of her nieces and nephews that she placed in a revocable trust last year for their benefit b) The $10,000 she paid four years ago to Dr. Meyers to pay off her father's medical bill c) The $28,000 remainder interest given to her daughter, Elsie, two years ago in a irrevocable Grantor Retained Income Trust that Elaine established and funded d) The $10,000 she paid to State University for Elsie's books, and room and board six years ago e) The $29,000 in cash she gave six years ago to her husband Rolf Assume that each of these transfers constitutes Elaine's only transfer to each transferee during the year in which the transfer was made. As her Financial adviser, which of the following transfers would you tell her are fully or partially includible in her total gifts for the purpose of calculating her federal gift tax liability? Explain your response.
