At the time of her death, Basu owned 60% of the stock of Crane Corporation. Over the

Question:

At the time of her death, Basu owned 60% of the stock of Crane Corporation. Over the past five years, Crane reported an average net profit of $150,000, and
the book value of its stock is $500,000. Assume that 6% is an appropriate after-tax rate of return for Crane’s business.

a. What is the amount of Crane’s goodwill?

b. How much as to the Crane stock is included in Basu’s gross estate?

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