Question

1. A, a widow, died in 2014 with the following assets: savings account ($15,000), checking account ($1,500), certificates of deposit ($43,000), stocks and bonds ($378,000), auto ($6,000), real estate ($254,000), which is subject to a recourse mortgage of $30,000, joint and survivor checking account with her son J in which she contributed all the funds ($2,500), and personal and household goods ($15,000). A also was the beneficiary of a testamentary trust created under the will of her late husband H, pursuant to which she was entitled to the income from the trust payable at least annually and over which she had a power to appoint the entire trust assets in favor of herself during her life or to the estate on her death. The value of the trust corpus equals $4,140,000. The amount of funeral and administration expenses equals $25,000. Her will provides that all of her estate is to pass to J.
   1. What is the amount of A’s gross estate for federal estate tax purposes? Consider §§ 2033, 2040, and 2041.
2. 2. What is A’s taxable estate assuming that her state of domicile imposes no taxes on her death? Consider §§ 2051 and 2053.
3. 3. What is A’s taxable estate assuming her state of domicile imposes an estate tax equal to the maximum state death tax credit that was allowable under § 2011 before the Tax Act of 2001? Consider §§ 2051, 2053, and 2058.
4. 4. What would be the amount of federal estate tax due under 1b and 1c? Consider §§ 2001 and 2010.
5. 5. Would a federal estate tax return be required to be filed by A’s executor? Consider § 6018.

Answer 1

page-t The answer below provided is about a widow died in 2014 having following assets such as savings account, chaking amount stocks and bonds, certificates of deposit all these provides monay for his son J. a) Calculation of Goocs estate: Gooss estate. The gross estate consists of the value of all property owned by a decedent or in which the decedent had an interest at the time of death. - calculation of Gooss estate Amount Particulars working note number $ 15,000 11508 43,000 Saving account Checking account cettificates of deposit Stocks and bonds - Auto . Real estate Joint checking account Pessoral & household goods Trust coopus - Total 378,00 6,000 2,54,000 2,500 15,000 4,140, ooo 41855,000 WN-1:- If the mostgage is recourse then the estate tax is calculated on the gross value of the real estate, without deducting the mooly age.

Page 4 d) Heirs of beneficiaries only pay tox when the amount of the estate that they in herit is greater than the exclusion limit established by the internal revenue service (IRS) . Since the taxable estate value is below the exclusion limit, no tax is payable. file the gross e) No, As federal estate exclusion executor need not estate tax reluon as does not exceed basic amount