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Jack Sage used the cash method of accounting. At the time of his death, he was...

Jack Sage used the cash method of accounting. At the time of his death, he was entitled to receive $12,000 from clients for his services and he had accrued bond interest of $8,000, for a total income in respect of a decedent of $20,000. He also owed $5,000 for business expenses for which his estate is liable. The income and expenses are reported on Jack's estate tax return. The tax on Jack's estate is $9,460, after credits. The net value of the items included as income in respect of the decedent is $15,000 ($20,000 - $5,000). The estate tax determined without including the $15,000 in the taxable estate is $4,840, after credits. The estate tax that qualifies for the deduction is what amount? A. $0 B. $4,620 C. $4,840 D. $9,460

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Answer #1

Sol:- Option B $4,620

Explanation

The estate tax that qualifies for the deduction is $9,460 − $4,840 =$4,620

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