Question

Sam died with a gross estate equal to $3,000,000. In his will, Sam provided for the following outright transfers: $1,000,000 to his wife; $1,000,000 to his daughter; and $1,000,000 to charity. What is Sam's taxable estate for estate tax purposes?

	$3,000,000
	$1,000,000
	$0.00
	$2,000,000

John Jones died at a time when his closely held business was valued at $3,500,000. His gross estate was $7,500,000. Administrative costs, debts and expenses totalled $500,000. Federal estate taxes totalled $1,250,000. The amount of taxes which can be deferred under IRC Section 6166 is equal to

Question 5 options:

	$0
	$625,000
	$583,333
	$1,250,000

Which of the following meets the requirements of a gift subject to the gift tax?

Question 6 options:

	A donor writes a check for $20,000 payable to the donee who cashes the check when it arrives in the mail.
	A donor writes a check for $20,000 payable to the donee. The donee receives the check and accidentally tears it up.
	A donor writes a check for $20,000 payable to the donee and forgets to mail it.
	A donor misplaces a check. The donee finds the check and endorses to himself for $20,000. Julie died owning certain interests in a family business, including interests in a partnership and a corporation. Her estate also included a life estate in an irrevocable trust. Julie incurred certain medical expenses in her year of death, which were paid by the estate shortly after her death. Which of the following postmortem income tax elections should the executor of Julie's estate consider? Question 19 options: An S election for the partnership An election to adjust the basis of the corporate assets An election to treat the irrevocable trust as part of the estate for income tax purposes Claiming a deduction for the medical expenses on Julie's income tax return for her year of death

Answer 1

Solution

The Answer is Option B ($1,000,000). This Because:

• All Charitable Transfers are deducted from the Value of Gross Estate. It includes all the direct gifts and property set aside for a charitable remainder trust or a charitable lead trust.

• Transfers to a Spouse (U.S. Citizen) – Outright Transfer to Spouse of Deceased Person is excluded from the estimation of taxable Estate. It is included under the Right of Survivorship.

Therefore, Sam’s Taxable Estate = 3,000,000 – 1,000,000 – 1,000,000

                                  = $1,000,000