At Her Death Tricia Had an Adjusted Gross Estate Consisting

question 66

Multiple Choice

At her death Tricia had an adjusted gross estate consisting of $8 million of property. Which of the following is a true statement about Tricia's estate or estate tax?

• A)Tricia must have a taxable estate over $8 million.
• B)Tricia's taxable estate will not exceed $8 million.
• C)Tricia must have a probate estate tax of zero.
• D)Tricia must have a gross estate tax of zero.
• E)None of these is necessarily truE.Since only negative adjustments are made to the gross estate in calculating the taxable estate, the taxable estate cannot exceed $8 million.Other adjustments (both positive and negative) make other generalizations problematic.

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Definitions:

Work in Process

Inventory that includes materials that have been partially processed but are not yet finished goods.

Overhead Costs

Indirect expenses related to the day-to-day running of a business, not directly tied to specific product or service production.

Variable Costing

An accounting method that includes only variable production costs (materials, labor, and overhead) in product costs and treats fixed overhead costs as period costs.

Absorption Costing

An accounting method that incorporates all direct and indirect manufacturing costs into the cost of a product.