Question
Thomas, Sr. owned a $1,000,000 life insurance policy on his life. Thomas, Sr. transferred the policy to Thomas, Jr. in 2017 when the cash surrender
Thomas, Sr. owned a $1,000,000 life insurance policy on his life. Thomas, Sr. transferred the policy to Thomas, Jr. in 2017 when the cash surrender value was $100,000. In 2018, Thomas, Jr. named his son Thomas III as beneficiary. When Thomas, Sr. died in 2019, his grandson, Thomas III collected $1,000,000. Which of the following is correct?
Thomas, Jr. made a $1,000,000 gift to Thomas III.
The value of the life insurance policy will not be included in Thomas, Sr.'s taxable estate.
The value of the life insurance policy will be included in Thomas, Sr.'s gross estate at $100,000
. Thomas, Sr. made a $1,000,000 gift to Thomas, Jr.
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Auditing A Risk Based Approach to Conducting a Quality Audit
Authors: Karla Johnstone, Audrey Gramling, Larry E. Rittenberg
10th edition
978-1305080577
