Jeffery Died in 2019 Leaving a $16,000,000 Gross Estate

question 39

Essay

Jeffery died in 2019 leaving a $16,000,000 gross estate.Six months after his death,the gross assets are valued at $16,100,000.In years prior to 2019 (but after 1976),Jeffery had made taxable gifts of $300,000.Of the $16,000,000 gross estate,estate assets valued at $3 million were transferred to his wife and $100,000 was used to pay administrative and funeral expenses.Jeffery had debts of $200,000 which were paid by the estate,and the remainder of the estate was transferred to his children.
a.What is the amount of Jeffery's taxable estate?
b.What is the tax base for computing Jeffery's estate?
c.What is the amount of estate tax owed if the unified credit is $4,505,800?
d.Alternatively,if six months after his death,the gross assets in Jeffery's estate declined in value to $15,000,000,can the administrator of Jeffery's estate elect the alternate valuation date?

---

Definitions:

Case Study

A detailed examination of a single subject (individual, group, or event) typically used for exploratory, explanatory, or descriptive research.

Neurological Trauma

Physical injury to the nervous system, which can result in temporary or permanent damage.

Short-Term Memory

The capacity for holding a small amount of information in an active, readily available state for a short period.

Hypothesis

A proposed explanation made on the basis of limited evidence as a starting point for further investigation.