Question

Hi Please help with problem. Note that the answer is not $4,110,000.

The amount of Kenneth's gross estate is $

At the time of his death this year on September 4, Kenneth owned the following assets, among others: Houston (TX) Independent School District bonds Stock in Brown Corporation Promissory note issued by Brad (Kenneth's son) Fair Market Value $2,500,000 900,000 600,000 In October, the executor of Kenneth's estate received the following: $120,000 interest on the Houston (TX) Independent School District bonds ($10,000 accrued since September 4), and a $7,000 cash dividend on the Brown stock (date of record was September 3). The declaration date on the dividend was August 12. Assume that the school district is solvent. The $600,000 loan was made to Brad in late 2015. Kenneth's will does not forgive Brad's note. The business that Brad started with the loan funds was not successful and is near receivership (note is considered worthless). What are the estate tax consequences of these transactions? Indicate whether each of the items below should be "Included", "Excluded" or "Partially Included/Excluded" from Kenneth's gross estate. Included a. b. Houston (TX) Independent School District bonds Stock in Brown Corporation Included ✓ c. Promissory note Included d. Partially Included/Excluded Interest from Houston (TX) Independent School District bonds Cash dividend on the Brown stock e. Included The amount of Kenneth's gross estate is s x .

Answer 1

Amount of Kenneth's gross estate = 2500000+900000+600000+(120000-10000)+7000 = $4117000