Rami and Wendy are married, and they own a parcel of realty, Blackacre, as joint tenants with the right of survivorship. Rami owns an additional parcel of realty, Redacre, in his name alone. Suppose Rami should die when Blackacre is worth $800,000 and Redacre is worth $750,000. What value of realty would be included in Rami's probate estate, and what value would be included in Rami's gross estate? Value of realty in probate estate Value of realty in gross estate
Q: A5
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- Hal and Wendy are married, and they own a parcel of realty, Blackacre, as joint tenants with the right of survivorship. Hal owns an additional parcel of realty, Redacre, in his name alone. Suppose Hal should die when Blackacre is worth $800,000 and Redacre is worth $725,000, what value of realty would be included in Hal's probate estate? Same facts as the prior question, what value would be included in Hal's gross taxable estate?Dave is terminally ill and does not expect to live much longer. Pondering the consequences of his estate, he decides how to allocate his property to his nephews. He makes a gift of appreciated property (i.e., fair market value exceeds adjusted basis) to George, and leaves appreciated property to Ian in his will. Each of the properties has the same fair market value. From an income tax perspective, which nephew is his favorite? Which nephew is his least favorite? Explain.Keith, 65, owns several rental tracts with a total fair market value of $100,000. He wants his son, Chris, to own the tracts as Chris's share of his estate. Keith is considering an annuity agreement whereby the tracts would be sold to Chris in return for Chris's promise to pay Keith an income for his life based upon Keith's original life expectancy. Upon Keith's death, Chris would own the rental tracts outright. What is one estate tax implication of this proposed private annuity for Keith's estate? A) There is no estate tax liability because the annuity payments expire upon Keith's death. B) The value of Keith's gross estate increases because the gross-up rule applies. C) The value of Keith's gross estate increases because the present value of past annuity payments is included. D) There is no estate tax liability because taxes are paid on the annuity during Keith's lifetime.
- Lamar owns a whole life insurance policy in which he is the insured and his children are the primary beneficiaries. In five more years, the policy will be paid up. Lamar would like to minimize the transfer tax on this asset for both his and his wife's estates. He also would like to avoid any income taxation under the grantor trust rules. Which one of the following estate planning techniques would best achieve Lamar's goals? A) Assigning both the policy and income-producing assets to a funded irrevocable trust either immediately or five years from now; earnings from the trust assets could be used by the trustee to pay the premiums B) Waiting until the policy is paid up in five years and then transferring ownership of the policy to an unfunded irrevocable life insurance trust C) Immediately transferring ownership of the policy to a revocable life insurance trust and gifting the annual premiums to the trustee D) Immediately assigning the policy to an unfunded…23. Keith, 65, owns several rental tracts with a total fair market value of $100,000. He wants his son, Chris, to own the tracts as Chris's share of his estate. Keith is considering an annuity agreement whereby the tracts would be sold to Chris in return for Chris's promise to pay Keith an income for his life based upon Keith's original life expectancy. Upon Keith's death, Chris would own the rental tracts outright. What is one estate tax implication of this proposed private annuity for Keith's estate? A) The value of Keith's gross estate increases because the gross-up rule applies. B) There is no estate tax liability because the annuity payments expire upon Keith's death. C) There is no estate tax liability because taxes are paid on the annuity during Keith's lifetime. D) The value of Keith's gross estate increases because the present value of past annuity payments is included.Mason buys real estate for $1,500,000 and lists ownership as follows: “Mason and Dana, joint tenants with the right of survivorship.” Mason dies first, when the real estate is valued at $2,000,000. How much is included in Mason’s gross estate if Mason and Dana are: Brother and sister? Husband and wife?
- Sherry transfers each of the following gifts during 2023. Sherry is not married. Identify the taxable gift amount for each item (before any exclusion) Gift Stock to her favorite charity with FMV of $40,000 and basis of $20,000 Cash to her daughter of $25,000 $200,000 to an irrevocable trust to distribute annually to her granddaughter $25,000 to pay for medical expenses for her mother The amount included in Taxable GiftsBang is to inherit 10 hectares of land when his very sick father dies sooner or later. Elmie offered to buy the land from Bang after she learned that the father is very sick. Can Bang sell the land? Yes, Bang can sell the land since his father is very sick. No, Bang cannot sell a future inheritance. Yes, Bang can sell the land as long as he secures his mother’s consent. No, Elmie should buy the land from Bang’s mother.Miles has owned a house in Honolulu, HI for 10 years. He and his wife, Shivani, have lived there together for six years. In 2023, Miles sells the house for 6,000,000. Miles originally paid 1, 230,000. If Shivani and Miles file a joint return, what is their: (a) Realized gain? (b) Recognized gain? (c) What if, instead, Miles and Shivani have never lived together, but are married and file a joint return. What is their recognized gain?
- Kandy and Jeff are married and own their home as tenants by the entirety. Kandy and Jeff divorce in 2000 but do not transfer the real estate. Jeff dies in 2020. Jeff's will leaves his property to his daughter, Jenny. Who gets Jeff's share of the property [whogetsproperty]Your client wants to purchase a residence for his aging parents, while minimizing the burden of ownership of the property for them and maximizing their enjoyment of it. Which one of the following states an advantage of titling the property in your client's name as sole owner rather than in joint tenancy with right of survivorship with his parents? A) The property will receive a step-up in basis when his parents die. B) The property will pass to his parents outside of probate. C) He will avoid gift tax liability by titling the property this way. D) His parents will have a life estate in the property if he predeceases them.Nell and Kirby are in the process of negotiating their divorce agreement, to be finalized in 2023. What should be the tax consequences to Nell and Kirby if the following, considered individually, became part of the agreement? Question Content Area a. In consideration for her one-half interest in their personal residence, Kirby will transfer to Nell stock with a value of $200,000 and $50,000 of cash. Kirby's cost of the stock was $150,000, and the value of the personal residence is $500,000. They purchased the residence three years ago for $300,000. The transfer of is a nontaxable event. Nell's basis for the stock is $fill in the blank 633301f7907bfc5_2. Kirby's basis in the house is $fill in the blank 633301f7907bfc5_3. Question Content Area b. Nell will receive $1,000 per month for 120 months. If she dies before receiving all 120 payments, the remaining payments will be made to her estate. , the payments are neither included in Nell’s gross income nor…