At the time of Matthews death, he was involved in the transactions described below. Matthew was a
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At the time of Matthew’s death, he was involved in the transactions described below.
- Matthew was a participant in his employer’s contributory qualified pension plan.
The plan balance of $2 million is paid to Olivia, Matthew’s daughter and beneficiary. The distribution consists of the following.
Employer contributions ………..........……………………… $900,000
Matthew’s after-tax contributions …………………… 600,000
Income earned by the plan ………….……………….. 500,000
- Matthew was covered by his employer's group term life insurance plan for employees. The $200,000 proceeds are paid to Olivia, the designated beneficiary.
a. What are the estate tax consequences?
b. The income tax consequences?
c. Would the answer to part (a) change if Olivia was Matthew's surviving spouse (not his daughter)? Explain.
DistributionThe word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...
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Related Book For
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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