The Alice Brittain Estate, valued at $14.8 million, includes the following assets: A joint and last survivor annuity that pays Alice $5,000 monthly; the surviving annuitant, her sister, Joan, would receive a survivorship annuity amount of $3,500 monthly A solely owned tree nursery business located on 1,000 acres in a rapidly developing urban fringe area in the state of Washington; the nursery and the business-related land are valued at $8 million (the land alone is valued at $4 million); Alice has worked actively in the business during the past 20 years; the nursery property and business are given to her son by her will 50,000 shares of publicly traded stock, valued at $3 million; there is a total of 50 million outstanding shares, with an average daily trading volume of 2 million shares When Alice dies, the valuation technique that would be appropriate to reduce the value of her gross estate is A)a minority discount on the tree nursery business. B)a blockage discount on the publicly held stock. C)a special use valuation on the family nursery. D)the alternate valuation date for the annuity.
The Alice Brittain Estate, valued at $14.8 million, includes the following assets: A joint and last survivor annuity that pays Alice $5,000 monthly; the surviving annuitant, her sister, Joan, would receive a survivorship annuity amount of $3,500 monthly A solely owned tree nursery business located on 1,000 acres in a rapidly developing urban fringe area in the state of Washington; the nursery and the business-related land are valued at $8 million (the land alone is valued at $4 million); Alice has worked actively in the business during the past 20 years; the nursery property and business are given to her son by her will 50,000 shares of publicly traded stock, valued at $3 million; there is a total of 50 million outstanding shares, with an average daily trading volume of 2 million shares When Alice dies, the valuation technique that would be appropriate to reduce the value of her gross estate is A)a minority discount on the tree nursery business. B)a blockage discount on the publicly held stock. C)a special use valuation on the family nursery. D)the alternate valuation date for the annuity.
Chapter28: Income Taxati On Of Trusts And Estates
Section: Chapter Questions
Problem 18P
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The Alice Brittain Estate, valued at $14.8 million, includes the following assets:
- A joint and last survivor annuity that pays Alice $5,000 monthly; the surviving annuitant, her sister, Joan, would receive a survivorship annuity amount of $3,500 monthly
- A solely owned tree nursery business located on 1,000 acres in a rapidly developing urban fringe area in the state of Washington; the nursery and the business-related land are valued at $8 million (the land alone is valued at $4 million); Alice has worked actively in the business during the past 20 years; the nursery property and business are given to her son by her will
- 50,000 shares of publicly traded stock, valued at $3 million; there is a total of 50 million outstanding shares, with an average daily trading volume of 2 million shares
When Alice dies, the valuation technique that would be appropriate to reduce the value of her gross estate is
A)a minority discount on the tree nursery business.
B)a blockage discount on the publicly held stock.
C)a special use valuation on the family nursery.
D)the alternate valuation date for the annuity.
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