Exam 13: The Estate Tax

Ted died on May 3. At the time of his death, he owned a beach house valued at $250,000. On June 10, the beach house was completely destroyed by a hurricane and there was no insurance coverage. If the executor elects to use the alternate valuation date, the executor will

Brent, who died on January 10, owned 10 shares of Potts Corporation stock. The closest trading dates to January 10 are January 8 (two working days before the date of death)and January 11 (one working day after the date of death). On January 8, the stock traded at a high of 101 and a low of 97, while on January 11, the high was 90 and the low was 86. The date-of-death per-share value is

An executor may elect to postpone payment of the estate tax attributable to a remainder or reversionary interest until 6 months after the interests of the other person(s)terminate.

Donna died on June 1 of the current year. The executor considers the following information when preparing her estate tax return: • In 1997, Donna transfers title to her personal residence to her son. The residence is worth $60,000 on the transfer date. Donna continued to live alone in the residence until her death. She did not pay any rent. At her death, the residence is worth $100,000. • In 1998, Donna created an irrevocable trust and funded it with $300,000 of assets. Donna names a bank as trustee. According to the trust agreement, all the trust income is to be paid out annually for 25 years. The trustee, however, is to decide how much income to pay each year to Donna's son and daughter. Upon termination of the trust, the assets are to be distributed equally among her two children or their estates. The trust's assets are worth $320,000 when Donna dies. • In 1998, Donna created a revocable trust with a bank named as trustee. She named her grandchild Joe as the beneficiary for life. Upon Joe's death, the property is to be distributed equally among Joe's descendants. The trust assets are worth $300,000 when Donna dies. How much would be included in Donna's gross estate?

Martin transfers stock to an irrevocable trust and names himself to receive the trust income for life with the remainder interest gifted to his son. When Martin dies

Identify which of the following statements is true.

The FMV of an asset for gift or estate tax purposes is the same except for