At the time of her death on September 4, Alicia
Chapter27: The Federal Gift And Estate Taxes
Section: Chapter Questions
Problem 37P
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Transcribed Image Text:At the time of her death on September 4, Alicia held the following assets:
Bonds of Emerald Tool Corporation
Stock in Drab Corporation
Insurance policy (face amount of $1,456,000) on the life
of her brother, Mitch
Traditional IRAs
Cash surrender value.
Fair Market Value
The amount included in Alicia's gross estate for these items is $
$3,640,000
4,368,000
*
291,200
1,092,000
Alicia also held a lifetime income interest in a trust (fair market value of trust assets $5,500,000) created by her late spouse Bert.
(The executor of Bert's estate had made a QTIP election.) In October, Alicia's estate received an interest payment of $15,000
($7,500 accrued before September 4) paid by Emerald and a cash dividend of $10,550 from Drab. The Drab dividend was
declared on August 19 and was payable to date of record shareholders on September 3. Although Mitch survives Alicia, she is the
designated beneficiary of the insurance policy. The IRAs are distributed to Alicia's children.
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