Problem 25-50 (LO 25-3) (Static)[The following information applies to the questions displayed below]Tom Hruise was an entertainment executive who had a fatal accident on a film set. Tom's will directed his executor todistribute his cash and stock to his spouse, Kaffie, and the real estate to a church, The First Church of Methodology. Theremainder of Tom's assets were to be placed in trust for three children. Tom's estate consisted of the following:Assets:Personal assetsCash and stockIntangible assets (film rights)Real estateLiabilities:MortgageOther liabilities$ 800,00024,000,00071,500,00015,000,000$ 111,300,000$ 3,200,0004,100,000$ 7,300,000Problem 25-50 Part a (Static)a. Tom made a taxable gift of $8 million in 2011. Compute the estate tax for Tom's estate. (Refer to Exhibit 25-1 and Exhibit 25-2)Note: Enter your answers in dollars, not millions of dollars.Estate Tax Due

Gross Estate refers to the value of the property owned by the person which is the amount that…

Answered: Problem 25-50 (LO 25-3) (Static) [The…

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter11: Investor Losses

Section: Chapter Questions

Problem 47P

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After the death of Lennie Pope, his will was read. It contained the following provisions:∙ $110,000 in cash goes to decedent’s brother, Ned Pope.∙ Residence and other personal property go to his sister, Sue Pope.∙ Proceeds from the sale of Ford stock go to uncle, Harwood Pope.∙ $300,000 goes into a charitable remainder trust.∙ All other estate assets are to be liquidated with the cash going to Victoria Jones.a. Prepare journal entries for the following transactions that subsequently occur:(1) Discovered the following assets (at fair value): Cash . . . . . . . . . . . . . . . . . . . . $ 19,000Certificates of deposit .. . . . . .90,000Dividends receivable . . . . . . . . . 3,000Life insurance policy . . . . . . . . 450,000Residence and personal effects . . . . . . . . . . . . . . . . 470,000Shares of Ford Motor Company . . . . . . . . . . . . . . . . 72,000Shares of Xerox Corporation . . . . . . . . . . . . . . . . . . . 97,000 (2) Collected life insurance policy.(3) Collected dividends…
(7) Refer again to Chapter 12, section 12-4, LIKE-KIND EXCHANGES. Mr. X owned an apartment building. He exchanged it for Ms. Y’s mansion, which Mr. X remodeled and uses as his office for his Schedule C accounting practice. Here are some additional facts: Mr. X’s adjusted basis in his apartment building was $1,400,000. Ms. Y’s adjusted basis in her mansion was $2,250,000. No cash or other / additional consideration passed in either direction in connection with the exchange. Neither property was encumbered by any debt. On the county property tax rolls, Mr. X’s apartment building was listed at a value of $3.25 million. On the county property tax rolls, Ms. Y’s mansion was listed at a value of $3.6 million. At the time of the exchange and for years before, Ms. Y actually lived in her mansion; it was strictly her personal residence – she never carried on any trade or business there, nor did anything else that ever would have re-sulted in classification of the mansion as anything…
LO.2, 3, 7, 11 Kristin Graf (123 Baskerville Mill Road, Jamison, PA 18929) is trying to decide how to invest a 10,000 inheritance. One option is to make an additional investment in Rocky Road Excursions in which she has an at-risk basis of 0, suspended losses under the at-risk rules of 7,000, and suspended passive activity losses of 1,000. If Kristin makes this investment, her share of the expected profits this year will be 8,000. If her investment stays the same, her share of profits from Rocky Road Excursions will be 1,000. Another option is to invest 10,000 as a limited partner in the Ragged Mountain Winery; this investment will produce passive activity income of 9,000. Write a letter to Kristin to review the tax consequences of each alternative. Kristin is in the 24% tax bracket.
1. Bonifacio, head of the family died on January 15 leaving the following properties andobligations: Cash in Bank, 50% donated mortis causa to Nat’l Government 50% to QCGovernment 3,000,000House and lot in Makati, Family Home 15,000,000Personal Properties 15,000,000Farm Lot 8,2,50,000Claims against an insolvent debtor 2,250,000Transfer in contemplation of Death (gratuitous) 15,000,000Transfer passing under special power of appointment 750,000Deductions ClaimedFuneral Expenses 5,750,000Judicial Expenses 675,000Donation Mortis causa to Quezon City Government 1,500,000Unpaid Mortgage on the farm lot 750,000Medical expenses (included in the funeral expenses incurred within 1 yearperiod with receipts) 2,250,000 The farm lot was inherited 5 ½ year by the decedent before his death with a value then ofP5,750,000 and a mortgage indebtedness of P1,500,000.REQUIREMENT: NET TAXABLE ESTATE.
35) Carl made the following transfers during the current year.• Transferred $900,000 in cash and securities to a revocable trust, life estate to himself and remainder interest to his three adult children by a former wife.• In consideration of their upcoming marriage, gave Lindsey (age 21) a $90,000 convertible.• Purchased a $100,000 certificate of deposit listing title as “Carl, payable on proof of death to Lindsey.”• Established a joint checking account with his wife, Lindsey, in December of the current year with $30,000 of funds he inherited from his parents. In January of the following year, Lindsey withdrew $15,000 of the funds.• Purchased for $80,000 a paid-up insurance policy on his life (maturity value of$500,000). Carl designated Lindsey as the beneficiary.• Paid $13,400 to a college for his niece’s tuition and $6,000 for her room and board. The niece is not Carl’s dependent.• Gave his aunt $52,000 for her heart bypass operation. The aunt is not Carl’s dependent. What are…
56 Nicanor has a house and lot which he acquired by virtue of donation from his parents ten years ago. The value at the time is Php 1 Million. When Nicanor was alive, the house and lot was mortgaged for Php 10,000,000 at ABC Bank. Nicanor had the property appraised in 2020 at Php 15,000,000.00. At the time of Nicanor’s death, value of the lot as prescribed by the City assessor is at Php 2,000,000.00 while the house is at Php 3,000,000. The zonal value in the BIR website is Php 4,000,000.00. The value of the house and lot assuming Nicanor died in 2021 is? Group of answer choices Php 7,000,000 Php 4,000,000 Php 15,000,000 Php 10,000,000 Php 5,000,000
27. G transferred $20,000,000 to Trust T. Trust T was an irrevocable trust which provided for income to individual I (G's friend) for 10 years, and the remainder to a qualified charity ("QC"). Assume the present value of the income interest was $5,000,000 at the time of the transfer, and the value of the trust (remainder interest) that eventually passed to I was $17,000,000. What is the amount of G's taxable gift? a. $0b. $3,000,000c. $5,000,000d. $20,000,000e. None of a-d is correct
QUESTION 49 Ramon made the following transactions within three years of his death: -He gave a long-term certificate of deposit, which he had owned for 10 years, to his sister -He released his retained power to amend a trust that he had created to benefit his children -He bought a new car and gave it to his brother for his birthday -He established an irrevocable living trust to provide for his children's education with his brother as the trustee, and funded the trust with $100,000 Which of these transactions will be included in Ramon's gross estate? A) The long-term certificate of deposit B) The release of his retained power to amend the trust C) The irrevocable living trust D) The new car
Jason Jackson was killed in a mountain-climbing accident in British Columbia. As Jason’s trusted friend and CPA, you have been named executor of his estate and guardian to his minor child, Cody Jackson.Jason’s estate consists of the following assets subject to probate:Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 15,000Vacant land in Colorado . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130,000Investment in Merkt stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54,000Investment in GTE stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,000Dividends declared on GTE stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000Investment in Trident bond fund . . . .…
H3. Grayson purchased his primary residence for $260,000. As part of the closing procedure, he paid $2,900 in loan origination fees, $750 to a lawyer to review the purchase contract and other closing papers, $250 for a property survey, and $1,200 for title insurance. He also gave the real estate agent a $100 gift certificate in appreciation for her hard work. What is Grayson's basis in the residence? Please show proper step by step calculation
Please complete both questions 37 and 38 37) While vacationing in Florida in November, Sally was seriously injured in an automobile accident (she died several days later). How are the following transactions handled for tax purposes? a. Bruce, Sally’s son and executor, incurred $6,200 in travel expenses flying to Florida, retrieving the body, and returning it to Frankfort, Kentucky, for burial.b. Early in the year, Sally had pledged $50,000 to the building fund of her church. Bruce paid this pledge from the assets of the estate.c. Prior to her death, Sally had promised to give her nephew, Gary, $20,000 when he passed the bar exam. Gary passed the exam late in the year, and Bruce kept Sally’s promise by paying him $20,000 from estate assets.d. At the scene of the accident and before the ambulance arrived, someone took Sally’s jewelry (i.e., Rolex watch and wedding ring) and money. The property (valued at $33,000) was not insured and was never recovered.e. As a result of the accident,…
Donna Stober's estate has the following assets (all figure approximate fair value): Investments in stocks and bonds $1,552000 House 756,000 Cash 74,900 Investment land 60,800 Automobiles (three rare vehicles) 59,000 Other assets 108,000 The house, cash, and other assets are left to the decendent's spouse. The investment land is contributed to a charitable organization. The automobiles are to be given to the decendent's brother . The investments in stocks and bonds are to be put into a turst fund. The income generated by this trust will go to the decendent's spouse annually until all of the couple's children have reached the age of 25. At that time, the…

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