Assume the same facts as in Problem C:13-47 except that Yuji’s will also provided for setting up a trust to be funded with $400,000 of property with a bank named as trustee. His wife is to receive all the trust income semiannually for life, and upon her death the trust assets are to be distributed equally among Yuji’s children and grandchildren.

In problem C: 13-47

When Yuji died in March 2017, his gross estate was valued at $8 million. He owed debts totaling $300,000. Funeral and administration expenses were $12,000 and $120,000, respectively. The marginal estate tax rate exceeded his estate’s marginal income tax rate. Yuji willed his church $300,000 and his spouse $1.1 million. Calculate Yuji’s taxable estate.

a. What was the amount of Yuji’s taxable estate? Provide two possible answers.

b. Assume Yuji’s widow died in December 2017. With respect to Yuji’s former assets, explain which items will be included in the widow’s gross estate. Provide two possible answers, but you need not indicate amounts.