Matt and Patricia Are Husband and Wife and Live in Oregon

question 23

Multiple Choice

Matt and Patricia are husband and wife and live in Oregon. In 1980 and using her funds, Patricia purchases a residence for $400,000, listing title to the property as "Matt and Patricia, joint tenants with right of survivorship." In 2016, Matt dies first when the residence is worth $2 million. A correct statement as to these transactions is:

• A)In 2016, Matt's gross estate includes $1 million and a marital deduction of $1 million is allowed for estate tax purposes.
• B)In 1980, Patricia made a gift to Matt but no marital deduction is available for gift tax purposes.
• C)In 1980, Patricia did not make a gift to Matt.
• D)In 2016, Matt's estate includes nothing as to the property.
• E)None of the above.

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Definitions:

Cognitive Schema

Mental structures that an individual uses to organize knowledge and guide cognitive processes and behavior.

Prototype

An original model or first form of something from which other forms are copied or developed.

Basic Concept

Fundamental ideas that underpin a subject or field of study, serving as the foundation for further knowledge and understanding.

Mental Set

A psychological tendency to approach situations in a certain way because that method has worked in the past, which can limit problem-solving abilities.