Ted Died on May 3

question 53

Multiple Choice

Ted died on May 3. At the time of his death, he owned a beach house valued at $250,000. On June 10, the beach house was completely destroyed by a hurricane and there was no insurance coverage. If the executor elects to use the alternate valuation date, the executor will

• A) take a casualty loss of $250,000 on the estate tax return.
• B) include the beach house in the gross estate at $250,000.
• C) take a casualty loss of $250,000 on the estate's income tax return.
• D) include the beach house in the gross estate at $0.

---

Definitions:

Cash Receipts

The money received by a business during a specific period, including amounts received from customers, interest, and dividends.

Statement of Cash Flows

A financial statement detailing the impact of alterations in balance sheet accounts and income on cash and cash equivalents, divided into operating, investing, and financing activities.

Adjusted Trial Balance

A list of accounts and their balances after the company has made all adjustments.

Comparative Balance Sheets

Financial statements that display a company's financial position at different points in time side by side, facilitating year-over-year or period-over-period comparison.