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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?
Suggested Answer: C
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21 comments · newest first
YO
Youlanda
2 days ago
True, but the life insurance is a big factor.
JO
Josephine
7 days ago
Still, the marital deduction only counts certain assets.
CO
Corrina
12 days ago
I see your point.
MI
Micheline
18 days ago
Adding everything together, including the insurance.
FR
Frederica
23 days ago
How do you get that?
MI
Micheline
28 days ago
I lean towards D) $1,100,000.
YO
Youlanda
1 month ago
Yes, but it goes to the estate.
CO
Corrina
1 month ago
But the life insurance is separate, right?
JO
Josephine
1 month ago
Because it includes all probate assets.
FR
Frederica
2 months ago
Why C?
JO
Josephine
2 months ago
I think it's C) $800,000.
YO
Youlanda
2 months ago
Tough question!
IL
Iluminada
2 months ago
Totally agree, the total should include the life insurance!
CO
Cornell
2 months ago
Wait, does the life insurance really count towards the deduction?
LA
Larae
2 months ago
I think the marital deduction is only for the probate assets, right?
WA
Wade
3 months ago
The life insurance policy is definitely part of the estate.
NU
Nu
3 months ago
Mr. Barlow's estate includes $200k in real estate and $100k in furniture.
AL
Alida
3 months ago
I'm a bit lost on whether the commercial real estate and personal property count towards the marital deduction since they went to the son.
HE
Herminia
3 months ago
If I recall correctly, the life insurance policy should be included in the estate value since it's payable to the estate. That could change the total.
BO
Bobbye
3 months ago
I remember practicing a similar question where we had to calculate the marital deduction, and I think it was just the assets left to Mrs. Barlow that count.
MI
Mireya
4 months ago
I think the marital deduction includes everything left to the spouse, but I'm not sure if the life insurance counts since it goes directly to the estate.