Moose died recently, leaving his entire $6 million gross estate to his wife, Trixie, who is named executor. Assume that the only estate expense is the executor’s commission of $100,000. Marginal tax rates for the taxpaying entities are Trixie’s Form 1040, 33%; the final Form 1040, 15%; the Form 1041, 28%; the Form 706, 35%.

a. Should Trixie accept or waive the commission? Why?

b. Where, if at all, should the estate deduct the commission? Why?

c. Would your answers to parts “a” and “b” change if Moose’s net estate was $200,000?

Answer rating: 100% (QA)

a Whether Trixie should accept or waive the commission depends on the tax consequences If Trixie acc... View the full answer