Essay about ESTATE GIFT TAX P5

1868 WordsFeb 23, 20148 Pages
Problem 5 (1) Grantor creates a trust with income to Spouse for life, remainder to Child if living and, if not, reversion to Grantor or Grantor’s estate. (a) If Grantor predeceases Spouse and Child, is Section 2037 applicable to the transfer? No. Section 2037 is not applicable to the transfer. Based on Section 2037, “ The value of the gross estate shall include the value of all property to the extent of any interest therein of which the decedent has at any time after September7, 1916, made a transfer, by trust or otherwise, if (1) possession or enjoyment of the property can, through ownership of such interest, be obtained only by…show more content…
In this case, Section 2037 does not apply because that grantor does not have a reversionary interest. And also A can possess or enjoy the property without surviving the decedent. What are included? Since section 2037 does not apply in this case, and the decedent made the gift within three years of death. Section 2035(a) invoked to cause inclusion in the gross estate. Based on section 2035(a), “ If (1) the decedent made a transfer (by trust or otherwise) of an interest in any property, or relinquished a power with respect to any property, during the 3-year period ending on the date of the decedent’s death, and (2) the value of such property would have been included in the decedent’s gross estate under section 2036, 2037,2038, or 2042 if such transferred interest or relinquished power had been retained by the decedent on the date of his death. The value of the gross estate shall include the value of any property (or interest therein) which would have been so included. “ As a result, the value included in the decedent’s estate is still the full property less the value of the spouse’s outstanding life estate. (c) Grantor creates a trust with income to S for life, remainder to A if living and, if A is not living, reversion to Grantor if Grantor is living; if Grantor is not living, remainder to

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