Louise, who died in January 2016, was survived by her husband, Larry. Louises gross estate was equal to $6,000,000 on the date of death. When Louise died, Louise and Larry owned an undeveloped parcel of real estate in Ocala. The fair market value of the land on the date of Louise's death was $750,000. Larry provided all of the consideration for the purchase of the land, paying $200,000 for it in 2010. Alternate valuation is not available to Louises estate as all assets owned by Louise will pass, either under Louises last will and testament or by operation of law, to Larry and hence, no estate tax will be due because of the marital deduction.

7. What is Larrys total basis the undeveloped parcel of real estate after Louises death?

a. $200,000.

b. $375,000.

c. $475,000.

d. $750,000.

8. Under Carl's will, Carl created a testamentary trust to be funded with $700,000 worth of assets. All of the income of the trust is payable to Carls child, Jane, for her life, and thereafter, the remaining assets of the trust will pass to The Public Charity. Jane is serving as the trustee. In addition, the trustee has the discretion to distribute all or such portion of the principal as the trustee shall determine for Janes heath, support, and maintenance. Janes father, Carl, died during the current taxable year with a gross estate of $5,350,000. Carls spouse died in 1985 and no estate tax return was due at her death. Which of the following statements is accurate with respect to the federal estate tax?

a The estate tax charitable deduction is available to Carls estate for the assets passing to The Public Charity.

b. Jane powers with respect to the assets of the trust constitute a general power of appointment.

c. Carls estate is not required to file Form 706, the Federal Estate and Generation-Skipping Tax Return.

d. When Jane dies, her right to trust income for life will not cause inclusion of the assets in her gross estate.