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Mr. Allen died early this year survived by his spouse Mrs. Allen. Among the items of family property are:
1. A $300,000 life insurance policy on Mr. Allen's life with Mrs. Allen designated as beneficiary. Mrs. Allen has been the owner of the policy ever since it was issued 4 years ago.
2. The family residence with a fair market value of $400,000. Mr. and Mrs. Allen own the residence jointly with the right of survivorship even though Mr. Allen purchased it with his separate funds.
3. A$40,000 bank account. Mr. and Mrs. Allen own the account jointly with the right of survivorship even though Mrs. Allen made all the deposits. What amount of the family property will be included in Mr. Allen's gross estate for federal estate tax purposes?
Suggested Answer: D
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39 comments · newest first
SH
Shawnda
10 months ago
Totally agree, it adds up to $500,000!
LE
Leonard
11 months ago
Wait, are you sure about the bank account?
EV
Evangelina
11 months ago
I think the total is $500,000, right?
VA
Vallie
11 months ago
Jointly owned property means it’s included in the estate.
JU
Justine
11 months ago
Life insurance goes to the beneficiary, so that's $300,000.
EL
Eladia
12 months ago
I’m really unsure about the total. If the house is $400,000 and the bank account is $40,000, does that mean we add those together for the estate?
FA
Fausto
12 months ago
I practiced a similar question where we had to determine the value of joint accounts. I think the full amount of the bank account might be included since Mrs. Allen made all the deposits.
GE
Geraldo
12 months ago
I think the joint ownership of the house means it might be included, but I’m not sure how much. Is it half or the whole value?
JE
Jesusita
1 year ago
I remember that life insurance policies go directly to the beneficiary and aren't included in the gross estate, so that's $0 for the policy.
LO
Lorrine
1 year ago
Hmm, I'm not sure about this one. There are a lot of details to consider, and I want to make sure I'm applying the estate tax rules properly. I'll need to think it through carefully and double-check my work before selecting an answer.
JE
Jestine
1 year ago
I'm a bit confused on how the jointly owned property is treated for estate tax purposes. I'll need to review the rules around joint tenancy with right of survivorship to make sure I understand it correctly before answering.
AI
Aileen
1 year ago
Okay, let's think this through step-by-step. The life insurance policy on Mr. Allen's life with Mrs. Allen as the beneficiary is not part of the gross estate since she was the owner. The jointly owned residence and bank account, however, will likely be included since they have the right of survivorship.
AL
Aleshia
1 year ago
Hmm, this seems like a tricky estate tax question. I'll need to carefully review the details about the life insurance policy, the jointly owned residence, and the joint bank account to determine what gets included in the gross estate.
ER
Erick
1 year ago
This seems straightforward to me. The life insurance policy is not part of the gross estate, but the jointly owned residence and bank account will be included, so the total amount is $520,000. I'm pretty confident that's the right answer.
AS
Ashlyn
1 year ago
Hmm, I'm a bit unsure about the steps here. I'll need to review the instructions carefully and make sure I don't miss anything.
UN
Una
1 year ago
This is a good question to test our knowledge of cabling security. I'll use the process of elimination to narrow down the options and select the best answer.
VA
Vanesa
1 year ago
Okay, let's see... The life insurance policy is definitely included, and the family residence is too, even though it was purchased with Mr. Allen's separate funds. I think I've got it - the answer is D. $360,000.
JA
Jame
1 year ago
Yes, the bank account is also included because it is owned jointly with the right of survivorship.
AM
Amie
1 year ago
But what about the bank account? Is that included as well?
KA
Kathrine
1 year ago
I think you're right, the life insurance policy and the family residence are both included in Mr. Allen's gross estate.
EM
Emilio
1 year ago
Ah, the joys of estate planning. I'm just glad I don't have to deal with this stuff in my day-to-day life. Leave it to the professionals, I say!
LI
Lindsey
1 year ago
C) $350,000
CO
Cora
1 year ago
B) $300,000
SA
Santos
1 year ago
A) $160,000
MA
Maryann
1 year ago
This question is making my head spin! I bet the IRS wishes they could just tax the whole $700,000 and call it a day. Where's the fun in that, though?
AR
Arlen
1 year ago
D) $360,000
MA
Marjory
1 year ago
C) $350,000
DA
Daniel
1 year ago
B) $300,000
ME
Merri
1 year ago
C) $350,000
FE
Felix
1 year ago
B) $300,000
CR
Cristen
1 year ago
A) $160,000
HE
Helene
1 year ago
A) $160,000
DI
Dick
1 year ago
Hmm, I'm not sure about this one. It seems like there are a lot of factors to consider. I better double-check my work on this one.
DA
Dannette
1 year ago
I think the answer is D. $360,000. The life insurance policy and the family residence are both included in the gross estate, but the joint bank account is excluded since Mrs. Allen made all the deposits.
PA
Paul
1 year ago
User2
CA
Cassandra
1 year ago
User1
RE
Rene
2 years ago
I'm not sure, but I think the life insurance policy and the bank account should be included in Mr. Allen's gross estate, so the answer might be D) $360,000.
IS
Isidra
2 years ago
I disagree, I believe the correct answer is D) $360,000.
LU
Ludivina
2 years ago
I think the answer is C) $350,000.