Key Assignment 1

Sean died on January 1, 2021 in a car accident. The property that he owned at the time of his death included the following:

Property	Basis	FMV on 1/1/21	FMV on 4/1/21
House	$180,000	$350,000
Rental Property	$140,000	$185,000
Annuity	$120,000	$360,000
Note Receivable	$60,000	$40,000
Personal Property	$180,000	$130,000
Car	$47,500	$42,500	$42,000
Total	$727,500	$1,107,500

All property listed above was owned in sole ownership by Sean. The annuity is a joint and survivor annuity and will continue to pay his wife Jamie for her lifetime. Seans will leaves all probate assets to his son and daughter in equal shares. Sean also owned a life insurance policy on his life. His basis in the policy was $83,000 and the death benefit was $1,000,000. The beneficiary of the insurance policy was Seans wife.

Seans funeral cost $15,000. The car was sold 4/1/20 for its fair market value on that date in order to pay for Seans $12,000 hand-carved marble headstone. Sean had $132,000 of medical expenses from the accident, but all expenses were covered by his medical insurance. The note receivable is being paid off $2,000 per month.

Highlight the correct answer and show your work to receive partial credit.

1. What is the value of Seans gross estate assuming the date of death valuation is selected?
   1. $1,107,500.
   2. $2,107,500.
   3. $2,107,000.
   4. $1,948,500.
2. Determine whether each of the following items is included in Seans probate estate.
   1. Yes, this item is in the probate estate.
   2. No, this item is not included in the probate estate.

	Property
	Annuity
	Note Receivable
	Life Insurance policy
	Car

3. What is the value of Seans marital deduction?
   1. $0.
   2. $1,360,000.
   3. $360,000
   4. $1,000,000