Exam 13: The Estate Tax

The maximum amount of the stock redemption proceeds under Sec. 303 is determined by summing all of the following except

Two years ago, Nils transfers a $200,000 life insurance policy on his life to his daughter, Gail. The policy is worth $60,000 at the time of transfer and Gail pays Nils $50,000. When Nils dies this year, the $50,000 cash is still in a savings account. The consideration offset when computing Nils's gross estate is

The estate tax return is due, ignoring extensions, 3-1/2 months after the decedent's date of death.

Yee made $3 million of taxable gifts in 1993 and paid gift taxes (less the unified credit)of $1,098,000. Yee died with a taxable estate of $10,000,000. At current rates, the gift taxes payable on $3 million would be $1,145,800. Yee died in a year when the unified credit was $2,045,800. Determine her estate tax liability.

Michael Moriarty, a widower, is quite elderly and is beginning to do some estate planning. His goal is to reduce his transfer taxes. He is considering purchasing land with a high potential for appreciation and owning it with his grandson as joint tenants with rights of survivorship. Michael would provide all of the consideration, estimated to be about 11.5 million. What tax issues should Michael Moriarty consider with respect to the purchase of the land?

In 2010, Mike transfers $100,000 of leased land to a trust. The trust income is payable to Mike's son for 13 years, after which time the land is to revert to Mike. This year, Mike dies when the land is valued at $210,000. The applicable federal rate is 10%, and the reversionary actuarial factor is 0.30. How much of the trust value must be included in Mike's estate?

Identify which of the following statements is true.

Explain why living trusts are popular tax-planning vehicles.

In 2001, Polly and Fred, brother and sister, purchased a condominium at a golf resort. Polly contributed 60% of the $200,000 cost; Fred contributed 40%. Polly dies in the current year when the condominium has a $300,000 value. How much is included in Polly's estate?

The gross-up rule requires

In 2002, Gert made a $5,000,000 taxable gift. The 2002 gift tax on $5,000,000 was $2,275.800. Gert was entitled to a unified credit of $345,800, resulting in a gift tax of $1,193,000. The marginal tax rate in 2002 is 50%. For the year of Gert's death (2020), the marginal rate for $5,000,000 of transfers is 40%. the tax on $5,000,000 would equal $1,945,800 before subtracting any credit. In arriving at Gert's estate tax liability, what is the amount subtracted for 2002 gift taxes paid?

Yoyo Corporation maintains a retirement plan for its employees to which it makes 70% of the contributions and the employees make 30%. Gary dies this year and is employed at the time of his death. Gary's spouse will receive an annuity valued at $600,000 from the retirement plan. How much of the annuity will be included in Gary's gross estate?

Identify which of the following statements is true.

For 2020, the unified credit is equivalent to a statutory exemption of

Five years ago, George and Jerry (his brother)provide $40,000 and $60,000, respectively, to purchase realty titled in the names of George and Jerry as joint tenants with right of survivorship. George dies in the current year and is survived by Jerry. At the time of George's death, the realty is valued at $300,000. What is the value of the realty in George's gross estate?

Taxpayers can avoid the estate tax by making gifts at least a year prior to death.

Reversionary interests in publicly traded stocks included in a gross estate must be valued

Discuss the transferor provisions relating to the estate tax, and provide three examples of transactions governed by the transferor provisions.

Which of the following is not a test for an interest to qualify for the marital deduction?

Following are the fair market values of Wilma's assets at her date of death: The executor of Wilma's estate did not elect the alternate valuation date. The amount includible in Wilma's gross estate is