Minnie Matthews, a widow and resident of Georgia, died on June 1, 2021. In the decedent's safe deposit box, the executors of the estate found these items:

1. Securities valued at $30,000 on the date of death. These were registered in her name and her son's name as joint owners.

2. Reality titles to a residence in Ohio valued at $6,500,000 and to a condominium in California valued at $4,000,000. These were bequeathed to her daughter under the will.

3. Deed of transfer to a 1955 irrevocable trust of $279,250 to pay the income and principal to her children but reserving to herself power to alter or change the beneficiaries or their proportionate interests, except that she could not name herself or her estate as beneficiary.

4. A 1978 issued deposit passbook showing $35,000 in a bank savings account in the joint names of Carol and her father. The deposit agreement specifically stated that upon the death of either Carol or her father, the survivor was entitled to the full amount of the deposit.

5. A 2017 deed of gift (12/23/17) transferring $1,063,000 to an irrevocable trust to help her sister have independent income. All of the trust income must be distributed to the sister. Because of the gift tax exclusion and the exemption, only $20,500 gift tax was paid on the gift.

6. Closely held stock in Peachtree Enterprises worth $150,000 on date of death, but it was only worth $90,000 on September 1, 2020.

7. Minnie also left the following additional property to be distributed under her will:

IBM stock	$350,000
Classic car and personal effects	120,000
Tax-exempt bonds	200,000

During the estate administration, the executors incurred the following:

Casualty loss (unreimbursed) in a federally declared disaster area	$80,000
Administration expenses	55,000

The executors also paid the following specific bequests:

Georgia State University (for educational purposes)	$50,000
Piedmont Baptist Church	65,000

Under Georgia law, the executors paid $70,000.

Using the above date of death values, compute the total gross estate.

Patrick King dies on January 15, 2021. On the date of his death, Patrick had a bank account which pays interest on a quarterly basis. On March 31, 2021, $12,000 of interest income is credited to Patrick's bank account.

(a.) If Patrick was on the cash basis of accounting at the date of his death, how much income would be included on his final income tax return?

(b.) Would your answer to (a) change if Patrick was on the accrual basis of accounting at the date of his death?

(c.) If Patrick does not recognize all of the interest income on his final income tax return in part (a) or (b), who would recognize the income?

A simple trust has ordinary gross income of $25,000 and $12,000 of capital gains, which are allocable to corpus. Its only deductible item is a trustee's commission of $4,000, allocable to corpus under the trust instrument.

a. How much is the trust's accounting income?

b. How much is the DNI that will be taxable to the beneficiary?

c. How much will the trust pay tax on?

Answer rating: 100% (QA)

Under inheritance and taxation laws the gross estate of a decedent is c... View the full answer