At the time of his death this year on September 4, Kenneth owned the following assets. Fair

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At the time of his death this year on September 4, Kenneth owned the following assets.

                                                                                          Fair Market Value

City of Boston bonds ………………………………………………  $2,500,000

Stock in Brown Corporation ………………………………………… 900,000

Promissory note issued by Brad (Kenneth’s son)…………………..….. 600,000


In October, the executor of Kenneth’s estate received the following: $120,000 interest on the City of Boston bonds ($10,000 accrued since September 4) and a $7,000 cash dividend on the Brown stock (date of record was September 5). The declaration date on the dividend was August 12.

The $600,000 loan was made to Brad in late 2010, and he used the money to create a very successful business. The note was forgiven by Kenneth in his will.

What are the estate tax consequences of these transactions?

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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Related Book For  answer-question

South Western Federal Taxation 2016 Corporations Partnerships Estates And Trusts

ISBN: 9781305399884

39th Edition

Authors: James Boyd, William Hoffman, Raabe, David Maloney, Young

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