If George were to die in the current year without change in any of the related facts, which one of the following is a disadvantage of the probate process for George?
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George has a gross estate valued at $1.8 million. His estate consists almost entirely of publicly held stock owned solely by him. He owes no debts. George's only living relative is a nephew whom he hasn't seen or heard from in 30 years. George has not executed a valid will.
If George were to die in the current year without change in any of the related facts, which one of the following is a disadvantage of the probate process for George?
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- Marci purchased her home seven years ago for $175,000. She sold it at a loss for $150,000 in 2022. Which of the following statements is true? Marci can claim a loss of $25,000 because the home sale was an involuntary conversion. O Marci can claim a loss of $3,000 but must carry over the remainder to future years until the loss is completely deducted. Marci cannot claim a loss for the sale of her home. If she itemizes deductions, she can claim a loss of $25,000 on her tax return.Cora, 79, has an estate that includes her personal residence valued at $120,000 and $18,000 in a bank account that is solely in her name. She would like to arrange her estate so that she maintains exclusive control of the assets during her lifetime, but at her death the assets will pass to her friend, Mabel, outside of probate. Based on Cora's goals and situation, which of the following are correct statements about will substitutes that she could use? She should put her bank account in tenancy in common with Mabel. She should title her personal residence in joint tenancy with her friend, Mabel. She should execute a will that names her friend, Mabel, as the legatee of the bank account and the devisee of the personal residence. She should place the bank funds in a payable on death (POD) account with Mabel as beneficiary. She should change the title on her personal residence to indicate a life estate reserved for her lifetime and a remainder to her friend, Mabel. A)IV and V…Statement 1: Pedro died giving Juan the power to appoint a person who will inherit his house and lot. Juan however, can only choose among Ana, Lorna or Fe. Juan decided to transfer the property to Fe through the former decedent’s will. The transfer from Juan to Fe is subject to estate tax. Statement 2: During Peter’s lifetime, he decided to give John as a gift his car subject to the condition that if John does not become a CPA within 3 years, Peter shall revoke the transfer. In the second year however, Peter died. The car should form part of Peter’s gross estate. Only statement 1 is correct Both statements are correct Only statement 2 is correct Both statements are incorrect
- Your client, age 74, has an estate consisting of solely owned assets valued at $4,500,000. His will, drafted in 2012, leaves his entire estate to his wife. No contingent beneficiary is named, and the will has no residuary clause. He would like his children to receive a tract of land worth $1,000,000 that is located in an out-of-state resort area. Your client has made $300,000 in adjusted taxable gifts to date. Which of the following are estate planning pitfalls that can be avoided if your client takes the actions described? He can avoid subjecting the estate to an ancillary probate procedure by placing the out-of-state property in joint tenancy with right of survivorship with his children. He can avoid subjecting the estate to probate by amending his will to place all of his assets in an irrevocable bypass trust. He can avoid causing part of the estate to pass to unintended beneficiaries by amending his will to name contingent beneficiaries and adding a residuary clause. He can avoid…2. Six years ago, Alvin loaned his prospective brother-in-law, Bruno, $20,000. The money was used to help Bruno pay for the wedding to Alvin's sister Kitty. Shortly after the wedding, it was discovered that Bruno was already married to someone else. Before Bruno could be indicted for bigamy, he disappeared and has not been heard from since. In the current year, Alvin dies still holding onto Bruno's note. For tax purposes, what do you suggest as to the handling of Bruno's note?Gus (age 84) and Belle (age 18) are married early in the year. Late in the same year, Belle confronts Gus about his failure to transfer to her the considerable amount of property he previously promised. Gus reassures Belle that she will receive the property when he dies. Because the transfer occurs at death, the estate tax martial deduction will avoid any Federal transfer taxes at the time. Comment on the issues involved and any misconceptions Gus may have.
- Jose sued Mari for breach of promise to marry. Mari lost the duly paid the court's award that included, among others, P100,000 as moral damages for the mental anguish Jose suffered. Did Jose earn a taxable income? He had no taxable income because it was a donation. He had no taxable income since moral damages are compensatory. He had taxable income since he made a profit. He had a taxable income of P100,000 since income is income from whatever source.Just prior to a major medical procedure, Cody gives his son, Liam, stock in Robin corporation (fair market value of $1,254,600 and basis of $1,756,440) at the time of the gift, Cody held some unused capital losses. The surgery was unsuccessful, and after Cody's death, Liam sells the stock for $1,932,084 A. What is the income tax result for Liam? B. What if the gift had not been made and the stock passes to Liam as a bequest from Cody?A deceased client's son walks into your office. His father's life was insured for $10 million and he had $10 million in other assets in his estate at the time of death. Assuming the client had used none of his unified credit, had no deductions, and left his entire estate to his son, what should the client's estate tax liability be? The client had purchased the policy many years ago and has been paying the premiums himself. What facts would have to change in order for the $10 million insurance proceeds to not be included in the father's estate? For example, what specific incidents of ownership would the son need to have in his father's policy?
- Yancy's personal residence is condemned as part of an urban renewal project. His adjusted basis for the residence is $572,600. He receives condemnation proceeds of $543,970 and invests the proceeds in stocks and bonds. If an amount is zero, enter "0". a. Calculate Yancy's realized and recognized gain or loss. Yancy's realized loss is $________________, and Yancy's recognized loss is $_________________. b. If the condemnation proceeds are $598,367, what are Yancy's realized and recognized gain or loss? Yancy's realized gain is $_______________, and Yancy's recognized gain is $_______________. c. Assume the house is rental property. Yancy's adjusted basis is $572,600 and he receives condemnation proceeds of $543,970 and invests the proceeds in stock. What are Yancy's realized and recognized gain or loss? Yancy's realized loss is $______________, and Yancy's recognized loss is $________________Frank is a widower. He has a $15.3 million estate consisting primarily of undeveloped real estate and life insurance. His children are the beneficiaries of his life insurance. His will leaves 30% of probate assets to each of his three children, with the residue to his cousin, James. Frank learned that his estate may have liquidity problems when he dies. Which one of the following techniques is the most appropriate to increase liquidity in Frank's estate? A) Change the beneficiary on his life insurance to his estate B) Transfer existing life insurance policies to an irrevocable life insurance trust with his children as beneficiaries, which allows the trustee to purchase some of the hard-to-sell property from the estate and/or to loan funds to the estate C) Place the undeveloped real estate in a qualified terminable interest property (QTIP) trust and make the QTIP election D) Amend his will to place the undeveloped real estate in an power of appointment trust
