Question40 Roland had a taxable estate of $4.5 million when he die

40 Roland had a taxable estate of $4.5 million when he died this year. Calculate the amount of estate tax due (if any) under the following alternatives.

a. Roland’s prior taxable gifts consist of a taxable gift of $1 million in 2005.

b. Roland’s prior taxable gifts consist of a taxable gift of $1.5 million in 2005.

c. Roland’s prior taxable gifts consist of a taxable gift of $2 million made in 2007 (within three years of his death).

41

Raquel transferred $100,000 of stock to a trust, with income to be paid to her nephew for 18 years and the remainder to her nephew’s children (or their estates). Raquel named a bank as independent trustee but retained the power to determine how much income, if any, will be paid in any particular year. Is this transfer a complete gift? Explain.

42

This year Gerry’s friend, Dewey, was disabled. Gerry paid $15,000 to Dewey’s doctor for medical expenses and paid $12,500 to StateUniversity for college tuition for Dewey’s son. Has Gerry made taxable gifts, and if so, in what amounts?

43. [LO 3] This year Dan and Mike purchased realty for $180,000 and took title as equal tenants in common. However, Mike was able to provide only $40,000 of the purchase price and Dan paid the remaining $140,000. Has Dan made a complete gift to Mike, and if so, in what amount?

44. [LO 3] Last year Nate opened a savings account with a deposit of $15,000. The account was in the name of Nate and Derrick, joint tenancy with the right of survivorship. Derrick did not contribute to the account, but this year he withdrew $5,000. Has Nate made a complete gift, and if so, what is the amount of the taxable gift and when was the gift made?

45. [LO 3] Barry transfers $1,000,000 to an irrevocable trust with income to Robin for her life and the remainder to Maurice (or his estate). Calculate the value of the life estate and remainder if Robin’s age and the prevailing interest rate result in a Table S discount factor for the remainder of 0.27.

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