Mason Is the Founder of Garnet Corporation and Owns All

question 175

Short Answer

Mason is the founder of Garnet Corporation and owns all of its stock, both common and preferred. The preferred stock is noncumulative and possesses no preferential rights as to liquidation. In 1996 and when the common stock has a value of $3,200,000, Mason gives it to his adult children. He retains the preferred stock which, at this time, has a value of $500,000. In 2013, Mason dies. Values on the date of death are: $4,500,000 for the common stock and $650,000 for the preferred.
a. What is the amount of the gift Mason makes in 1996?
b. How much as to Garnet Corporation is included in Mason's gross estate in 2013?

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Definitions:

Frontal

Pertaining to the front part of the brain, involved in decision making, problem solving, and controlling behavior.

Autonomic Nervous System

Part of the peripheral nervous system that controls involuntary body functions, such as heart rate, digestion, and respiratory rate.

Sympathetic

Relates to the part of the autonomic nervous system that prepares the body for intense physical activity and is often referred to as the fight-or-flight response.

Parasympathetic

Part of the autonomic nervous system responsible for relaxing the body and conserving energy.