In 2000, Mike Transfers $100,000 of Leased Land to a Trust

question 37

Short Answer

In 2000, Mike transfers $100,000 of leased land to a trust. The trust income is payable to Mike's son for 13 years, after which time the land is to revert to Mike. This year, Mike dies when the land is valued at $210,000. The applicable federal rate is 10%, and the reversionary actuarial factor is 0.30. How much of the trust value must be included in Mike's estate?

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Definitions:

Coefficient of Determination

A statistical measure, often denoted as R-squared, that represents the proportion of the variance in the dependent variable that is predictable from the independent variable(s).

Independent Variable

A variable in an experiment or analysis that is manipulated or categorized to observe its effect on a dependent variable.

Dependent Variable

The variable in an experiment that is expected to change as a result of manipulations of the independent variable.

Hydroxide ions

Negatively charged ions made up of one oxygen and one hydrogen atom, symbolized as OH-.