For each of the following, assume that the trust was worth $2,015,000 when established in 2015, and
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Question:
Sarah died.
For each case state: (i) whether a gift tax was paid, and if so approximately how much; (ii) why Sarah's interest, if any, is a retained interest, a general or limited power, or something else; (iii) what is included in Sarah's gross estate; and (iv) the estate's adjusted taxable gift.
a. Sarah established the trust to take care of her sister, Leia, who had been injured in a car accident. At Leia's death, the trust would terminate and go to her children. The trustee was Marcy National Trust, Inc., Inc. Sarah died two years after establishing the trust.
b. Same as prior, but the trust document gave Sarah the power to require the Trust to hold back income or, if Sarah thought it was needed, to distribute corpus to Leia.
c. Sarah's mother established the trust to take care of Sarah's sister. The trust document gave Sarah the power to require the Trust to hold back income or, if Sarah thought it was needed, to distribute corpus to Leia. Sarah died five years after the trust was established.
Related Book For
South-Western Federal Taxation 2018 Comprehensive
ISBN: 9781337386005
41st Edition
Authors: David M. Maloney, William H. Hoffman, Jr., William A. Raabe, James C. Young
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