Exam 13: The Estate Tax

Four years ago,David gave land to Mike that he purchased for $70,000,which is presently worth $100,000.Three years ago,Mike exchanged the land (then worth $150,000)along with a $100,000 cash contribution made by David for a new piece of land worth $250,000.The new land is titled with David and Mike as joint tenants with the right of survivorship.When Mike dies this year,the land is worth $300,000.Mike's estate will include

Identify which of the following statements is true.

Julian died on November 1 and owned 100 shares of a New York Stock Exchange stock.The stock traded at a high of 100 and a low of 98 on November 1.It opened at 98 and closed at 100.On Julian's estate tax return,what will the per-share and total value of the stock be?

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

Identify which of the following statements is false.

Identify which of the following statements is true.

Betty dies on February 20,2013.Her estate consisted of the following assets,all valued as of her date of death: Stock with a basis of $40,000 and a fair market value of $200,000 Home valued at $1,500,000 and a basis of $490,000 Cash of $70,000 Life insurance on Betty's life owned by her daughter with a $500,000 face value What is Betty's gross estate?

Listed stocks are valued at their closing price on the date of death.

Mr.Howell died this year.He willed a copyright with a 10-year remaining life to Mrs.Howell.His will also sets up a trust for the benefit of Mrs.Howell whom he entitles to receive all of the income semiannually until the earlier of her remarriage or her death.Upon her remarriage or death,the trust property is to be distributed to their children.Do the copyright and trust transfers qualify for the marital deduction? Explain.

In 2006,Roger gives stock valued at $100,000 to Martha.Roger and Martha are not related.In 2008,Martha uses the stock then valued at $110,000 as partial consideration to acquire realty costing $220,000.Pat (her brother)furnishes the remaining $110,000 of consideration.The realty is titled in the names of Martha and Pat as joint tenants with right of survivorship.This year,Martha dies and Pat survives.The realty is valued at $300,000 at Martha's death.How much,if any,of the realty's value will be included in Martha's estate?

Appraisal methods used to value real estate for estate tax purposes may include

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?

Joe dies late in 2011 and his estate is subject to an estate tax of $2 million.He leaves all of his assets to his daughter,Claudia.Claudia dies in early 2013.Which of the following statements is correct?

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

Wally died on November 15.His gross estate includes 100 shares of ABC Corporation stock.On November 15,ABC's stock trades were at a high of $100,a low of $92,and a close of $94.What is the per-share value of the stock in Wally's estate?

Identify which of the following statements is false.

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

Identify which of the following statements is true.

One of the major problems facing executors in managing the estate is

At Mark's death,Mark owed a debt of $40,000 plus $2,000 of accrued interest.Mark's funeral expenses were $5,000,and Mark's charge card had a balance due of $400.The expected administration costs for the estate are $2,000.Assume the estate will owe no income taxes in the next few years and that the taxable estate is expected to be in excess of $1 million.What amount should the estate deduct?