Greta Hopkins, an unmarried individual, died in 2021 at the age of 86. She was survived by

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Question:

Greta Hopkins, an unmarried individual, died in 2021 at the age of 86. She was survived by an adult nephew, Rodney (58 years old), and an adult niece, Gilda (56 years old). Upon inventory of her estate property, her executor discovered the items listed below.

Investment account with a date of death PRINCIPAL ACCOUNT VALUE OF $10,000,000 listed in her name alone. In addition to this amount, income of $50,000 that had been earned by, but not paid to, Greta was listed in a separate income account.

A principal residence titled in her name alone with a date of death value of $400,000.

Bank accounts with date of death balances of $300,000 held in joint tenancy with right of survivorship with Gilda; Greta provided all of the consideration for this account and Gilda had never withdrawn any funds for personal use. Gilda only had written checks on Greta's behalf when Greta was physically incapacitated in the period before her death.

A traditional pension account with a date of death value of $400,000; this pension account had a pay-on-death designation to Rodney and Gilda in equal shares according to Greta's beneficiary designation filed years ago.

Cars and various personal effects worth $180,000

An insurance policy with a death benefit of $200,000 payable to Rodney and Gilda in equal shares; this policy was purchased by Greta and insured her own life.

Greta's will directs that $3,000,000 of her estate should be deposited in a charitable trust set up by her (although not previously funded). Greta's will also directed charitable bequests to be made to her local Episcopal Church, Shattuck-St. Mary's school, and her collegiate alma mater, Hamline University. These bequests totaled $500,000. Under the terms of her will, the remainder of her available estate passes to Rodney and Gilda in equal shares.

Debts, claims, expenses of administration, funeral expenses, and state death taxes totaled $250,000.

Greta did not made "taxable" gifts during her lifetime.

a. What is the value of Greta's NET ESTATE (after all deductions) for estate tax valuation purposes?

b. What is the value of her PROBATE ESTATE?

c. Assuming only the facts given in the problem and that Gilda and Rodney take direct cash distributions in closing the pension account, which of the following statements is true?

Question 37 options:

	There are no income tax consequences as a result of Greta's death and the facts above.
	The estate will report $50,000 of income on its income tax return (US 1041) while neither Gilda nor Rodney will report any taxable income as a result of Greta's death.
	The estate will report $50,000 of income on its income tax return (US 1041) while Gilda and Rodney will each report $200,000 of taxable income on their individual tax returns as a result of Greta's death.
	None of the above are true