Solution-Is the estate correct in disregarding the

Is the estate correct in disregarding the valuation factor

Assignment Help Accounting Basics

Reference no: EM132650901

Problem - Ted Lucas (age 48) is killed in an automobile accident. One of the provisions of Ted's will establishes a trust with $3 million in assets. Under the terms of the trust, a life estate is granted to Mel (age 69) with the remainder interest passing to Faye (age 45) upon Mel's death. Mel is Ted's widower father, who is suffering from pancreatic cancer. Faye is Ted's wife, who is in good health. Under the applicable valuation tables, the life estate value in $3 million for a person age 69 is $1,709,280 (based on an interest rate of 4.2 percent).

If the Lucas estate valued Mel's estate in accordance with the IRS tables, this would reduce the marital deduction allowed for Faye's remainder interest to $1,290,720 ($3,000,000 - $1,709,280). Because Mel has aggressive terminal cancer, however, life estate is disregarded, and the full $3 million is claimed as a marital deduction.

Is the estate correct in disregarding the valuation factor for a life estate in light of Mel's medical condition?

Reference no: EM132650901

Questions Cloud

Women in leadership and social change : Research on women in leadership is a relatively recent phenomenon. In the 1970s, researchers began looking at gender differences as they relate to leadership.

Calculate the payback period followed by recommendation : How to Calculate the Payback Period and Net Present Value followed by your recommendations. Aussie Ltd has decided to sell a new line of golf clubs.

What is the longest wavelength of light : Your friends have given you a pair of dark blue jeans as a gift. Sadly, faded jeans are currently in style. You decide to break down

What do you suggest as to the handling of Bruno note : In the current year, Alvin dies still holding Bruno's note. For tax purposes, what do you suggest as to the handling of Bruno's note

Is the estate correct in disregarding the valuation factor : Is the estate correct in disregarding the valuation factor for a life estate in light of Mel's medical condition

How the pandemic affects : Discuss how the pandemic affects the above two points. Compare what the organization do and what employees need during a pandemic.

English speaking caribbean is constrained : The interaction of people living in the English speaking caribbean is constrained by experiences in their shared historical past.

Describe what employees expect from the organization : Describe what employees expect from the organization and why. [You could get some hints from why people decide (not) to change jobs or resign.]

Secret dirty deeds with democratic values and processes : To facilitate the reconciliation of secret dirty deeds with democratic values and processes,

User Account

All Pages

Is the estate correct in disregarding the valuation factor

Reference no: EM132650901

Reference no: EM132650901

Questions Cloud

Reviews

Write a Review

Accounting Basics Questions & Answers

How much control does fed have over this longer real rate

Coures:- fundamental accounting principles

Accounting problems

Theory of interest - term structure of interest rates

Write a report on internal controls

Prepare the bank reconciliation for company

Cost-benefit analysis

Theory of interest

Liquidity and profitability

What is the expected risk premium on the portfolio

Simple interest and compound interest

Capm and venture capital

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT