Question
At the time of his death this year on September 4, Kenneth owned the following assets, among others: Fair Market Value Houston (TX) Independent School
At the time of his death this year on September 4, Kenneth owned the following assets, among others:
Fair Market ValueHouston (TX) Independent School District bonds$2,500,000Stock in Brown Corporation900,000Promissory note issued by Brad (Kenneth's son)600,000
In October, the executor of Kenneth's estate received the following: $120,000 interest on the Houston (TX) Independent School District bonds ($10,000 accrued since September 4), and a $7,000 cash dividend on the Brown stock (date of record was September 3). The declaration date on the dividend was August 12. Assume that the school district is solvent.
The $600,000 loan was made to Brad in late 2015. Kenneth's will does not forgive Brad's note. The business that Brad started with the loan funds was not successful, and the note has a zero value (note is considered worthless).
What are the estate tax consequences of these transactions?
Indicate whether each of the items below should be "Included", "Excluded" or "Partially Included/Excluded" from Kenneth's gross estate.
a.Houston (TX) Independent School District bondsIncluded
b.Stock in Brown CorporationIncluded
c.Promissory noteIncluded
d.Interest from Houston (TX) Independent School District bondsPartially Included/Excluded
e.Cash dividend on the Brown stockIncluded
The amount of Kenneth's gross estate is 4,117,000
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started