Roy dies and is survived by his wife, Marge. Under Roy’s will, all of his otherwise uncommitted assets pass to Marge. Based on the following property interests, determine the marital deduction allowed to Roy’s estate.
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, Sally’s auto was totally destroyed. The auto had a basis of $52,000 and a fair market value of $28,000. In January, the insurance company pays Sally’s estate $27,000.
38) Roy dies and is survived by his wife, Marge. Under Roy’s will, all of his otherwise uncommitted assets pass to Marge. Based on the following property interests, determine the marital deduction allowed to Roy’s estate.
a. Timberland worth $1.2 million owned by Roy, Marge, and Amber (Marge’s sister) as equal tenants in common. Amber furnished the original purchase price.
b. Residence of Roy and Marge worth $900,000 owned by them as tenants by the entirety with right of survivorship. Roy provided the original purchase price.
c. Insurance policy on Roy’s life (maturity value of $1 million) owned by Marge and payable to her as the beneficiary.
d. Insurance policy on Roy’s life (maturity value of $500,000) owned by Roy with Marge as the designated beneficiary.
e. Distribution from a qualified pension plan of $1.6 million (Roy matched his employer’s contribution of $500,000) with Marge as the designated beneficiary
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