Clark Griswold is a wealthy engineer and Inventor who retired to his residence in Fort Collins (Larimer County), Colorado. Clark is married to Ellen and they nave two adult children, Russell and Audrey. Clark passed away on March 22 of this year at the age of 60, and his executor, Frank Shirley, has hired you to calculate the estate tax and prepare a draft of the 2013 estate tax return (pages 1 through 3). Clark, estate Is being administered throng the Larimer County Probate Court.

Frank has inventoried Clark, assets and has listed the value of his assets below. The auto, residence, and checking account were owned jointly (with the right of survivorship) with his wife. Clark also owned a whole life insurance policy with a cash Surrender value Of $50,000. Ellen and Clark, estate were listed as beneficiaries on the insurance polity with Ellen receiving $1 million and the estate receiving the remainder Of the proceeds. The Ajax Common Sock, the real estate, and the patent were all owned by Clark rather than joint ownership Frank also noted that the real estate is Subject to an $800,000 mortgage. At his death Clark also owed $1,500 on his credit card.

Clark's will instructs Frank to distribute Clark's property as follows: Ellen inherits Clark's personal effects, Russell inherits the patent, and Audrey inherits 10,000 shares of tile Ajax stock and the real estate. The will also instructs Frank to distribute 20,000 shares of the Ajax stock to State University (an educational institution), and after paying Clark, personal debts, the residual of the estate (if any) is divided equally between Russell and Audrey The estate paid Clark's personal debts (credit card debt) and $97,300 of funeral expenses associated wits Clears burial. Finally the estate paid Frank $27.000 in executor's fees associated with the administration of Clark's estate.

Clark, tax records indicate Mat in 2007 Clark gave $500,009 of Ajax stock to Russell and %500,000 of cash to Audrey. Clark filed a timely gift ax return (Form 709) and paid no gilt taxes.

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Property Auto Personal effects Checking account 30,000 shares of Ajax common stock Residence Life insurance Real estate Patent Value $ 20,000 75,000 250,000 1,200,000 6,800,000 4,000,000 3,500,000 4,225,000 Adjusted Basis $ 55,000 110,000 250,000 270,000 480,000 50,000 2,100,000 100,000 Property Auto Personal effects Checking account 30,000 shares of Ajax common stock Residence Life insurance Real estate Patent Value $ 20,000 75,000 250,000 1,200,000 6,800,000 4,000,000 3,500,000 4,225,000 Adjusted Basis $ 55,000 110,000 250,000 270,000 480,000 50,000 2,100,000 100,000

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