At the time of her death on October 4, 2016, Kaitlyn was involved in the following transactions. ∙ Was the sole life beneficiary of a trust (assets worth $2 million) created 10 years ago by Paul (Kaitlyn’s husband). The transfer was by gift of securities then worth $500,000 (Paul did not make a QTIP election). Paul and Kaitlyn’s children are the remainder persons. Owned stock in Mauve Corporation (basis of $800,000 and fair market value of $1 million). On September 7, 2016, a dividend of $48,000 was declared on the stock payable to all shareholders on record as of October 3, 2016. The $48,000 was received by Kaitlyn’s executor on October 19, 2016. ∙ Kaitlyn made a taxable gift of $400,000 in 2004. As to these transactions, Kaitlyn’s gross estate includes:

At the time of her death on October 4, 2016, Kaitlyn was involved in the following transactions. ∙ Was the sole life beneficiary of a trust (assets worth $2 million) created 10 years ago by Paul (Kaitlyn’s husband). The transfer was by gift of securities then worth $500,000 (Paul did not make a QTIP election). Paul and Kaitlyn’s children are the remainder persons. Owned stock in Mauve Corporation (basis of $800,000 and fair market value of $1 million). On September 7, 2016, a dividend of $48,000 was declared on the stock payable to all shareholders on record as of October 3, 2016. The $48,000 was received by Kaitlyn’s executor on October 19, 2016. ∙ Kaitlyn made a taxable gift of $400,000 in 2004. As to these transactions, Kaitlyn’s gross estate includes:

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter18: The Federal Gift And Estate Taxes

Section: Chapter Questions

Problem 40P

See similar textbooks

Similar questions

At the time of her death on September 4, Alicia held the following assets: Fair Market Value Bonds of Emerald Tool Corporation $900,000 Stock in Drab Corporation 1,100,000 Insurance policy (face amount of $400,000) on the life of her brother, Mitch 80,000* Roth IRAs $300,000 *Cash surrender value. Alicia also held a lifetime income interest in a trust (fair market value of trust assets $2,000,000) created by her late spouse Bert. (The executor of Bert's estate did not make a QTIP election.) In October, Alicia's estate received an interest payment of $11,500 ($6,000 accrued before September 4) paid by Emerald and a cash dividend of $9,000 from Drab. The Drab dividend was declared on August 19 and was payable to date of record shareholders on September 5. Although Mitch initially survives Alicia, she is the designated beneficiary of the insurance policy. The IRAs are distributed to Alicia's children. Mitch is killed by a rock slide while mountain climbing in…
David Collins died during the current year. The personal representative of David’s estate reviewed the following assets: 1) Stocks in David’s name only: $ 2,000,0002) Investment property in a trust that David has the right to revoke: $1,500,0003) Primary home owned jointly with his wife (wife did not contribute to the purchase): $1,000,0004) Insurance policy owned/insuring David with the proceeds payable to his daughter: $800,0005) Vacation home owned jointly with his son (son did not contribute to the purchase): $500,0006) Cash placed in an irrevocable trust by David 8 years ago with David’s friend as trustee: $600,000 What is the value of David’s gross estate for estate tax purposes?
Carl made the following transfers during the current year. What are Carl’s taxable gifts for the current year? • Transferred $900,000 in cash and securities to a revocable trust, life estate to himself and remainder interest to his three adult children by a former wife. • In consideration of their upcoming marriage, gave Maria a $90,000 convertible. • Purchased a $100,000 certificate of deposit listing title as “Carl, payable on proof of death to Maria.” • Established a joint checking account with his now-wife, Maria, in December of the current year with $30,000 of funds he inherited from his parents. In January of the following year, Maria withdrew $18,000 of the funds. • Purchased for $80,000 a paid-up insurance policy on his life (maturity value of $500,000). Carl designated Maria as the beneficiary. • Paid $23,400 to a college for his niece Mindy’s tuition and $11,000 for her room and board. Mindy is not Carl’s dependent. • Gave his aunt Betty $52,000 for her heart bypass…
In the current year, Mary entered in to the following separate independent transactions: a) Mary sold shares of a public corporation to her husband. The shares, which had a value of $10,000 at the time of the sale, originally cost $4,000. Mary sold them to her husband for $7,000 in cash. During 2020, Mary’s husband received dividends of $500 on these shares. In January 2021, Mary’s husband sold the shares. Assume the couple do not elect out of the 73(1) rollover. b) Mary transferred shares of a public corporation with a fair market value of $8,000 to her RRSP. The shares originally cost $10,000 when first purchased by Mary. Required: (a) Describe the tax consequences, in detail, of these transactions for Mary, and her husband in 2020 and 2021.
Mr and Mrs. Swerte made the following donations during the calendar year 2018 (common property unless otherwise stated): Date Donations January 15 To Fe, legitimate daughter, on account of her forthcoming marriage, 10,000 shares which are not traded in the stock exchange. The book value at the time of donation was P52 per share. To Juana, family friend of couple, on account of her birthday, P20,000. February 10 To Pilar, legitimate daughter, on account of her marriage on February 1, 2015, a piece of antique jewelry from the capital property of Mr. Swerte. The pawn value of the jewelry was P45,000. To Ernest, legitimate son, on account of her graduation, a piece of land costing P500,000. The fair market value per BIR at the time of adoption was P1,000,000. Its zonal value was P1,200,000. The piece of land had an unpaid mortgage of P100,000 which was assumed by the donee. To Lilian, Mrs Swerte's sister; on account of her forthcoming marriage, cash P150,000 September 4 To CPAR University,…
Charles Kamp, a divorced person, died in February of the current year with an estate consisting of assets valued at $7,008,000 and liabilities of $380,000. Charles’s will contained the following provisions:a. Robert Sullivan would serve as executor of the estate and trustee for the Kamp Children Trust.b. Timberland with a market value of $560,000 would be placed in a charitable remainder trust. The income from the trust would accrue to the benefit of his sister Marsha Kamp Rodriquez. Income would be reduced by the depletion charge associated with the number of board feet of lumber harvested.c. Securities with a value of $25,000 would be given to the Milwaukee Art Museum, recognized as a charitable organization.d. Securities with a value of $600,000 would be given to his married daughter, Maria Kamp Wilson.e. Each of his three best hunting friends would be paid $200,000 from the proceeds of the sale of Charles’s investment in hunting land in Alaska. The hunting land was valued at…
Carl made the following transfers during the current year. What are Carl’s taxable gifts for the current year? 1.Transferred $900,000 in cash and securities to a revocable trust, life estate to himself and remainder interest to his three adult children by a former wife. 2.In consideration of their upcoming marriage, gave Maria a $90,000 convertible. 3.Purchased a $100,000 certificate of deposit listing title as “Carl, payable on proof of death to Maria.” 4.Established a joint checking account with his now-wife, Maria, in December of the current year with $30,000 of funds he inherited from his parents. In January of the following year, Maria withdrew $18,000 of the funds. 5.Purchased for $80,000 a paid-up insurance policy on his life (maturity value of $500,000). Carl designated Maria as the beneficiary. 6.Paid $23,400 to a college for his niece Mindy’s tuition and $11,000 for her room and board. Mindy is not Carl’s dependent. 7.Gave his aunt Betty $52,000 for her heart bypass…