A. Jack, age 75, died on December 1, 2016. Jack was married at time of his death. He is survivied by his wife and his only son, jim. Jack died intestate and Jim was appointed the administrator of his estate. At the time of his death Jack owned the following assets:

B. Cash savings account held jointly with his wife $1,550,000

C. Series EE Bonds face value $600,000 DOD value $950,000 Accured Interest $90,000. The bonds were redeemed on December 15, 2016.

D. 4 Family building owned as tenant in common with his brother, Tom. Property was purchased 1/1/73 cost $500,000 MV DOD $3,500,000.00 Mortgage payable $300,000. His portion of rent receivable from property at DOD was $2,500 which was collected 12/28/16.

E. Art collection MV DOD $1,600,000.

F. 5,000 shares of ABC stock DOD high 31 low 28 closing price 30 (stock was purchased 2/1/1998 cost $125,000)

G. 10,000 shares of XYZ stock DOD high 35 low 33 closing price 34 (stock was purchased 5/1/1980 cost $130,000)

H. Life estate in principal residence cost $400,000 MV DOD $1,000,000

I. Life insurance policy held in ILIT $1,000,000 Life insurance policy- owned by his son $500,000

J. Stock portfolio held in a revocable trust $1,700,000

K. In June 2016 Jack gifted his 2 family rental property to his son and retiained the right to receive the rental income for the rest of his life. The property was purchased for $250,000. On the date of gift and DOD, the property value was $800,000. No gift tax was paid.

L. Automobile $60,000

M. Note Receivable $500,000. Accured interest of $5,000 was received on December,20 2016

N. The following expenses were incurred by his estate:

Funeral expense $15,000

Executor commission $50,000

Attorney Fees $30,000

Accountant Fees $12,500

Court Fees $ 2,000

Storage fees $4,000

Appraisal fees $2,000

Charitable contributions To the following charities:

Cancer society $5,000

Lukemia Society $5,000

Make a Wish Foundation $5,000

O. At the time of his death, Jack owed the following:

Credit Cards $10,000

Medical expenes $ 5,000

P. During 2016 Jack & his estate had the following additional income & expenses:

Dividends $4,500

Rental Expenses: Mortgage interest 4family - $6,000

Interest 15,000 R/E

Taxes 4 family 3,000 R/E Taxes 2 family 2,500

Rental income: 4 family property 24,000

2 family property 15,000

Assume all income and expenses were received/paid ratably over the year

Prepare the necessary tax returns for 2016

please provide all this information above on a tax form 706 and 1041

Answer rating: 100% (QA)

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