Robert A. Smith, Sr. was born February 14, 1938 and died on May 31, 2019 of natural causes. Robert, Sr. was predeceased by his wife, Ann, who died January 5, 2018. Anns executor made a portability election for $2,000,000 deceased spouse unused exemption (DSUE) none of which was applied by Robert for lifetime gifts. Roberts adult children: Rachel and Robert, Jr. are alive. At the time of his death, Robert lived at 1410 N. Main Street, Bowling Green, Ohio 43402. Details regarding Robert Sr.s estate are summarized below.

• At the time of his death, Robert, Sr. owned two whole life policies issued by Falcon Insurance Company. One policy has a maturity value of $2,000,000 and lists Rachel and Robert, Jr. as the beneficiaries. The other policy has a maturity value of $2,000,000 and lists Robert, Sr.s estate as the beneficiary.
• Robert, Sr. was a participant in his employers contributory qualified pension plan. As of May 31, 2019, the balance in his accounts is found to be:

Employers contribution $2,000,000

Robert, Sr.s contribution 2,000,000

Income earned by the plan 1,000,000

Because Robert, Sr. failed to designate a new beneficiary after his wife died, the pension plan proceeds of $5,000,000 were paid to his estate on July 23, 2019.

• As an investment, Robert, Sr. and his wife had purchased a tract of land near Cleveland, Ohio in 2014. They paid $4,000,000 for the property and listed ownership as Robert, Sr. and Ann Smith, tenants by the entirety with right of survivorship. The Cleveland property is worth $8,000,000 on May 31, 2019.
• The purchase of the Cleveland property (see previous item) was partly financed with mortgage funds provided by PNC Bank. As of May 31, 2019, the mortgage has a balance due of $500,000 (including accrued interest).
• In 2018, Robert, Sr. and his daughter purchased grazing land in Fayette County with title listed as Robert, Sr. and Rachel Smith as equal joint tenants with right of survivorship. The land is near Columbus and was considered to have future potential for residential development. Of the $1,000,000 purchase price, Rachel provided the entire amount (from funds she inherited from her mother). The land has a value of $3,000,000 on May 31, 2019.
• Farmland in Hamler, Ohio with title listed as Robert, Sr., Ann, Rachel, and Robert, Jr. Smith, equal tenants in common. (Anns interest in the ranch passed to Robert, Sr. under her will.) Although Ann purchased the farmland, she did not elect gift-splitting when she filed a Form 709 reporting the gift. The farmland has a value of $3,000,000 on May 31, 2019.
• Robert, Sr. inherited his personal residence on Memorial Drive from Ann. Under Robert, Sr.s will, the property is to pass to St. Paul Catholic Church to serve as a parsonage for their priest. On May 31, 2019, the property has an appraised value of $3,000,000.
• Robert, Sr. created a revocable trust. PNC Bank served as the trustee which distributed income from the trust to Rachel and Robert, Jr. for their lifetimes and the remainder to Robert, Sr.s grandchildren. The trust has a value of $3,000,000 on May 31, 2019.
• Ann created an irrevocable trust, Robert, Sr. served as the trustee and had the power to appoint to himself or their children as needed. The remainder goes to Robert, Sr.s grandchildren. The trust has a value of $4,000,000 on May 31, 2019.
• Robert owned stock in Apple, Incorporated. The stock was valued at $5,000,000 on May 31, 2019. The board of directors declared a $100,000 quarterly dividend on May 1, 2019 for shareholders of record on June 1, 2019. The $100,000 dividend was paid on July 1, 2019.

• Other assets belonging to Robert, Sr. include the following.

Checking accounts at PNC Bank $10,000

CD at PNC Bank (includes accrued interest to May 31, 2019) 105,000

Fiat Chrysler Corporate bonds (includes accrued interest to May 31, 2019) 1,000,000

Personal and household effects (furniture, auto, jewelry, etc.) 100,000

A note receivable arose from a loan Robert, Sr. made in 2015 to his nephew, Alan Smith. Alan use the $500,000 to start a real estate business. After a year of losses, Alan has had two successful years and expected to repay the loan. Robert, Sr. forgave Alans debt in his will.

• Robert, Sr.s liabilities (besides the mortgage held by Plano Trust Company and paid by the estate) include:

Credit card debt $3,000

Unpaid household bills (utilities, security service, pest control, etc.) 2,000

Amount due on church pledge which was paid by the estate 10,000

Amount promised to a niece, Natalie Smith, when she quit smoking 25,000

Federal income tax liability (January 1, 2019 to May 31, 2019) 50,000

• Funeral and administration expenses are listed below.

Funeral expenses 15,000

Attorneys fees 40,000

Accounting fees 20,000

Appraisal fees and probate court costs 35,000

Rachel and Robert, Jr. are the sole heirs. Due to her experience in handling her mothers estate, Robert, Sr.s last will and testament designates Rachel as the executor of his estate. For obvious reasons, she serve without fee. The administration of Robert, Sr.s estate is completed with the Wood County Probate Court on November 30, 2019.

Prepare and estate tax return (Form 706) for Robert, Sr.. Make the following assumptions.

• No 2032 (alternative valuation) election is made, and 2032A (special estate valuation) and 6166 (deferral of estate taxes) are not appropriate.
• Disregard any request for information that is not available.
• Some deductions require a choice (Form 706 or Form 1041) and cannot be deducted twice. Resolve all choices in favor of Form 706.
• Relevant Social Security numbers:

Name SSN Phone Number Address

Robert, Sr. D. Smith 123-45-6785

Ann Smith 123-45-6786

Rachel Smith 123-45-6787 216-123-4567 18600 Main Street, Cleveland, OH 44130

Robert, Jr. Smith 123-45-6788 513-123-4568 550 Main Street, Cincinnati, OH 45202

Natalie Smith 123-45-6789

Check figures: Total Gross Estate Line 1 Part II--Tax Computation ($35,215,000) and Line 5 Part II--Tax Computation ($31,540,000).