In 2012, Joe who is 75 years old, created a 10 year GRAT into which he transferred $1 million of securities. Joes basis in the securities is $250,000. At the time Joe transferred the assets into the GRAT, the IRC Sec. 7520 rate was 4.8%. Joes annuity interest was valued at $311,000. At the end of the 10 years, the assets within the trust transfer to Joes brothers and sisters.

1.

When the GRAT was created, what was the value of the taxable gift:

Group of answer choices

$689,000

$1,000,000

$750,000

$311,000

2.

Joe dies in 2017 when the value of the trust is $1,200,000. What amount of the trust assets will be included in Joes gross estate?

Group of answer choices

$ 1,200,000

$ 311,000

$ 1,000,000

$0

3.

Given that Joe has died in 2017, what is the basis of the residence in the hands of its beneficiaries?

Group of answer choices

$ 1,200,000

$ 250,000

$ 311,000

$ 1,000,000

4.

Assume Joe survives the 10 year retained period. The gift to trust was covered by the unified credit and no gift tax was paid on the transfer to trust. At the expiration of the term, the trust assets are valued at $1,500,000, which the siblings sell for that amount. What is the taxable gain to be recognized on this sale?

Group of answer choices

$ 1,250,000

Zero

$ 1,500,000

$ 1,289,000