Your client, Fred, just passed away. Assume that Freds assets consisted of $3,000,000 in cash/ money market accounts and $7,000,000 in stock funds. Fred had purchased $1,000,000 in life insurance payable in a lump sum to his wife, Wilma, and a residence (purchased in 1993) valued at $2,000,000 that is owned as tenants by the entirety with Wilma. There was a $500,000 mortgage loan left on the residence. Fred also had a closely held corporation, Flintstones Inc., valued at $9,000,000 where Fred owns all shares. Assume other debts and administrative expenses are $1,000,000. Also assume that Fred and Wilma had two adult children and that Fred did not use any of his lifetime credit at his death. His will states that Wilma will get $3,000,000 in addition to the home, $1,000,000 to the SPCA, and the rest will be split equally between his children.

1- Give Fred and Wilma some advice on their estate and compute the gross estate of Fred if he died today. Compute Fred's adjusted gross estate and taxable estate.