Eric Dies in the Current Year and Has a Gross

question 90

Multiple Choice

Eric dies in the current year and has a gross estate valued at $16,500,000.The estate incurs funeral and administrative expenses of $100,000 and also pays off Eric's debts which amount to $250,000.Eric bequeaths $600,000 to his wife.Eric made no taxable transfers during his life.Eric's taxable estate will be

• A)$4,250,000.
• B)$15,550,000.
• C)$4,150,000.
• D)$16,500,000.

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Definitions:

Forward Rate

An agreed upon rate for a financial transaction that will occur at a future date, used in forward contracts.

Zero-coupon Bond

A debt security that does not pay interest but is traded at a deep discount, rendering profit at maturity when the bond is redeemed for its face value.

Semi-annually

Occurring twice a year.

Effective Annual Yield

Annualized interest rate on a security computed using compound interest techniques.