In 2018, Thalia Purchased Land for $900,000 and Lists Title

question 55

Multiple Choice

In 2018, Thalia purchased land for $900,000 and lists title in the names of her daughters as follows: "April and Theresa, joint tenants with right of survivorship." In 2020, April and Theresa purchase an apartment building for $1 million as equal tenants in common; April furnished $400,000 and Theresa furnished $600,000 of the cost. April died before Theresa in 2021 when the land is worth $1.5 million and the apartment building is worth $2 million. One of the results of these transactions is:

• A) April made a gift to Theresa of $100,000 in 2020.
• B) None of the land is included in April's gross estate.
• C) April's gross estate includes $800,000 (40% × $2 million) as to the apartment building.
• D) April's gross estate includes $1,750,000 as to these properties.

---

Definitions:

Noncumulative

A term often used to describe preferred stocks or dividends that do not accumulate if they are unpaid or not declared.

Nonparticipating

Describing a type of insurance policy or preferred stock where the holder is not entitled to share in the company's profits beyond a specified amount.

Journal Entries

Entries made in the accounting records to document financial transactions, updating account balances accordingly.

Noncumulative

A term often referring to certain preferred stock dividends that do not accumulate if unpaid, meaning if a dividend is skipped, it is not owed in the future.