Solved by verified expert :2251. CHAPTER
18—THE FEDERAL GIFT AND ESTATE TAXES Question PR #9
In 1990, Bret and Olivia acquire realty for $1 million, with Bret furnishing
$400,000 of the purchase price and Olivia providing the balance. Title to the
property is listed as: “Bret and Olivia, joint tenants with right of
survivorship.” In 2011, Olivia dies first when the realty is worth $4 million.
How much is included in her gross estate under the following circumstances?
a.
Bret and Olivia are brother and sister.
b.
Bret and Olivia are husband and wife.
2252. CHAPTER
18—THE FEDERAL GIFT AND ESTATE TAXES Question PR #10
In 2000, Dale and Andrea acquire real estate for $1,000,000, with Dale
furnishing $400,000 of the purchase price and Andrea providing the balance.
Title to the property is listed as: “Dale and Andrea, equal tenants in common.”
Dale dies first in 2011, when the real estate is worth $2,000,000.
a.
Were there any tax consequences in 2000? Explain.
b.
How much, as to the real estate, is included in Dale’s gross
estate?
c.
As to parts a. and b., would it make any difference whether
Dale and Andrea are brother and sister or
husband and wife?
2253. CHAPTER
18—THE FEDERAL GIFT AND ESTATE TAXES Question PR #11
Murray owns an insurance policy on the life of his father, Ethan. Upon Ethan’s
death, the policy proceeds of $2,000,000 are paid to the designated
beneficiary, Grace. What are the tax consequences resulting from Ethan’s death
based on the following assumptions?
a.
Grace is Murray’s daughter.
b.
Grace is Murray’s wife.
c.
What are the tax consequences if Murray dies first (i.e.,
predeceases both Grace and Ethan)?
2254. CHAPTER
18—THE FEDERAL GIFT AND ESTATE TAXES Question PR #12
At the time of her death in 2011, Amber owns property worth $4,000,000. Other
information regarding her affairs is as follows.
Unpaid pledge to the building fund of her church
$50,000
College graduation gift she had promised her grandson
20,000
Local property taxes owed (accrued prior to death)
100,000
Casualty loss to uninsured vacation home (fire occurred one
month before death)
400,000
Mortgage owed on personal residence
700,000
All of these items (except the casualty loss) were paid by her estate and none
were deducted on Form 1041 (income tax return of the estate). What is Amber’s
taxable estate?
2255. CHAPTER
18—THE FEDERAL GIFT AND ESTATE TAXES Question PR #13
At the time of Clint’s death in 2011, part of his estate consists of the
following.
·
Roth IRA (value of $1,000,000) with Jennifer as the designated
beneficiary.
·
Land (worth $3,000,000) held in joint tenancy with Jennifer.
Jennifer is Clint’s wife and originally furnished the purchase price.
·
Building (worth $3,000,000) held as equal tenants in common
with Jennifer and Dana. Dana is Clint’s mother, and she originally purchased
the property.
Under Clint’s will, all of his property passes to his wife, Jennifer. How much
marital deduction is Clint’s estate allowed?
2256. CHAPTER
18—THE FEDERAL GIFT AND ESTATE TAXES Question PR #14
Calvin’s will passes $800,000 of cash to his widowed sister, Muriel. The estate
tax attributable to the cash is $110,000. Muriel dies seven years later, and
the estate tax generated by the $800,000 is $100,000. How much of a credit for
tax on prior transfers will Muriel’s estate be allowed?
2257. CHAPTER
18—THE FEDERAL GIFT AND ESTATE TAXES Question ES #1
As reflected by the tax law, Congressional policy relative to the Federal gift
and estate taxes has been very inconsistent. Comment on this policy regarding
the following time periods.
a.
From original enactment of these taxes up to the Tax Reform
Act of 1976.
b.
From the Tax Reform Act of 1976 to EGTRRA.
c.
From EGTRRA to the Tax Relief Act (TRA) of 2010.
2258. CHAPTER
18—THE FEDERAL GIFT AND ESTATE TAXES Question ES #2
The Federal gift and estate taxes were restructured in 1976 into the unified
transfer tax. The objective of the change was to eliminate the tax difference
between transfers during life (gift tax) and at death (estate tax). Does this
uniformity of treatment currently exist? In this regard, comment on the
following differences between the two taxes.
a.
Applicable unified transfer tax credit.
b.
Applicable unified transfer tax rates.
c.
Availability of the charitable and marital deductions.
d.
Availability of the annual exclusion.
