American College HS330 Exam - Topic 1 Question 100 Discussion

Actual exam question for American College's HS330 exam

Question #: 100
Topic #: 1

Mr. Barlow died early this year. Under the terms of his will he left all his real estate and tangible personal property to his son. All the remainder of his probate estate was left to his wife, Mrs. Barlow. The following is a list of Mr. Barlow's probate assets and their fair market values at the time of his death:

Commercial real estate $200,000

Furniture and fixtures 100,000

Listed common stock 150,000

Notes receivable 250,000

In addition, Mrs. Barlow owned a $400,000 life insurance policy on Mr. Barlow's life with Mr. Barlow's estate designated as beneficiary. Based on this information, what is the amount of property in Mr. Barlow's estate qualifying for the federal estate tax marital deduction?

A$150,000

B$400,000

C$800,000

D$1,100,000

Show Suggested Answer

Suggested Answer: D

by Tracey at Sep 18, 2024, 11:44 AM

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Helaine

4 months ago

Totally agree, the estate value is significant!

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Percy

5 months ago

Wait, does the life insurance count towards the marital deduction?

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Chauncey

5 months ago

I think it's $800,000, but not sure about the life insurance part.

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Dorothy

5 months ago

The marital deduction includes the assets left to Mrs. Barlow.

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Yong

5 months ago

Mr. Barlow's total probate assets are $1,100,000.

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Amber

6 months ago

I believe the total probate assets are $1,100,000, but I’m not clear on how much of that qualifies for the marital deduction. I need to double-check the rules on life insurance.

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Iraida

6 months ago

I’m a bit confused about the life insurance policy. Does it get added to the estate value if the estate is the beneficiary? I thought it might be excluded.

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Giuseppe

6 months ago

I remember practicing a similar question where we had to calculate the estate tax deduction. I think we only include the probate assets for the marital deduction, which might be around $800,000 here.

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Sheron

6 months ago

I think the marital deduction includes everything that passes to the spouse, but I'm not sure if the life insurance counts since it's technically owned by Mrs. Barlow.

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Audry

6 months ago

Okay, I think I've got it. The probate assets left to the wife are the listed common stock ($150,000) and the notes receivable ($250,000), for a total of $400,000. That must be the correct answer.

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Daniel

6 months ago

I'm a bit confused. The life insurance policy on Mr. Barlow's life is also mentioned, but it's not clear if that's part of the probate estate or not. I'll need to double-check the rules on life insurance and the marital deduction.

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Shelia

6 months ago

This seems straightforward. The question states that all the remainder of the probate estate was left to Mrs. Barlow, so that should be the amount that qualifies for the marital deduction.

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Tayna

6 months ago

Okay, let me think this through step-by-step. The question is asking about the amount of property in Mr. Barlow's estate that qualifies for the federal estate tax marital deduction. I need to identify which assets go to the wife and calculate the total value of those.

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Christene

6 months ago

Hmm, good point. I think the life insurance policy proceeds would be included in the marital deduction since they were payable to the estate. So the total would be the sum of the remaining probate assets left to the wife.

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