When Yaakov died in March 2013, his gross estate was valued at $8.5 million.

When Yaakov died in March 2013​, his gross estate was valued at $8.5 million. The marginal estate tax rate exceeded his​ estate’s marginal income tax rate because the estate collected only about $5,000 of income. Yaakov willed his spouse $1.2 million. His taxable estate​ (before marital​ deduction) was comprised of the​ following:

Gross estate

$8,500,000

Debts

(350,000)

Administration expenses

(125,000)

Funeral expenses

(16,000)

Charitable contribution to church

(150,000)

Assume Yaakov​’s will also provided for setting up a trust to be funded with $550,000 of property with a bank named as trustee. His wife is to receive all the trust income semiannually for​ life, and upon her death the trust assets are to be distributed equally among Yaakov​’s children and grandchildren.

a.    What was the amount of Yaakov​’s taxable​ estate? Provide two possible answers. (with & without any election)

With (Select one) Election Without Election

Gift Splitting

QTIP

Sec 6166

(Select One)

Adjusted taxable gifts

Gift taxes

Marital deduction

Taxable estate before marital deduction $________ $________

Minus: (select one)

Adjusted taxable gifts

Gift taxes

Marital deduction

Taxable estate before marital deduction $________ $________

Taxable Estate $________ $________

b. Assume Yaakov​’s widow died in December 2013. With respect to Yaakov​’s former​ assets, which items will be included in the​ widow’s gross​ estate? Provide two possible​ answers, but you need not indicate amounts.

With Election $________

Without Election $ ________

 

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