Mel and Susan Carter are working with an estate planner for disposition of their property during life and at death. For their personal residence in Los Angeles, they wish to live in the residence for their life and then transfer the property to their two children, Ron T. Carter and Diane L. Carter, as remaindermen at the date of death of the latest surviving spouse. The interest in their residence is transferred as follows: "To Mel Carter and Susan Carter for life, then to Ron T. Carter and Diane L. Carter." What type of ownership interest will Ron Carter and Diane Carter have after this change in the title? Life estate Fee simple absolute Remainder Conditional estate
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- Jack and Liz live in a community-property state and their vacation home is community property. This year they transferred the vacation home to an irrevocable trust that provides their son, Tom, a life estate in the home and the remainder to their daughter, Laura. Under the terms of the trust, Tom has the right to use the vacation home for the duration of his life, and Laura will automatically own the property after Tom's death. At the time of the gift, the home was valued at $500,000, Tom was 35 years old, and the 57520 rate was 5.4 percent. Use discount tables Exhibit 25-4, Required: a. What is the amount, if any, of the taxable gifts? b. Would your answer be different if the home was not community property and Jack and Liz elected to gift-spilt? Complete this question by entering your answers in the tabs below. Required A Required B What is the amount, if any, of the taxable gifts? Taxable gift to Laura by each Trocable gift to Tom by each Amount $ 33,520 $ 27,000 Required>Paul and Marie Weir moved from a community property state to a common law property state last year. Shortly before their move, Paul used funds from the family bank account to purchase an airplane solely in his name. After they moved, Paul sold the residence that they had acquired during their marriage and used those funds to purchase a new residence of an equivalent value solely in his own name. Paul and Marie entered into a spousal agreement specifying that all household furnishings belong to Marie and the airplane belongs to Paul. Last month, Paul died. What are the estate planning implications of the Weirs' move from the community property state to a common law property state? A)The airplane was never considered to be community property. B)The new residence is still considered to be community property. C)All of their assets remain community property because spousal agreements are invalid in community property states. D)The ownership interests in all of the property are…Paul and Marie Weir moved from a community property state to a common law property state last year. Shortly before their move, Paul used funds from the family bank account to purchase an airplane solely in his name. After they moved, Paul sold the residence that they had acquired during their marriage and used those funds to purchase a new residence of an equivalent value solely in his own name. Paul and Marie entered into a spousal agreement specifying that all household furnishings belong to Marie and the airplane belongs to Paul. Last month, Paul died. What are the estate planning implications of the Weirs' move from the community property state to a common law property state?
- Juan dies and is survived by his wife, Marie. Under Juan’s will, all of his otherwise uncommitted assets pass to Marie. Based on the property interests listed below, determine the marital deduction allowed to Juan’s estate. Residence of Juan and Marie worth $1,500,000 owned by them as tenants by the entirety with right of survivorship. Juan provided the original purchase price. Insurance policy on Juan’s life (maturity value of $300,000) owned by Juan with Marie as the designated beneficiary.Cora, 79, has an estate that includes her personal residence valued at $120,000 and $18,000 in a bank account that is solely in her name. She would like to arrange her estate so that she maintains exclusive control of the assets during her lifetime, but at her death the assets will pass to her friend, Mabel, outside of probate. Based on Cora's goals and situation, which of the following are correct statements about will substitutes that she could use? She should put her bank account in tenancy in common with Mabel. She should title her personal residence in joint tenancy with her friend, Mabel. She should execute a will that names her friend, Mabel, as the legatee of the bank account and the devisee of the personal residence. She should place the bank funds in a payable on death (POD) account with Mabel as beneficiary. She should change the title on her personal residence to indicate a life estate reserved for her lifetime and a remainder to her friend, Mabel. A)IV and V…Bill and Ana were married on June 10, 1997. They have lived in California all their married life. Ana filed for divorce on December 1, 2019. Bill moved out of the house they owned jointly on May 10, 2021, but they continued with marriage counseling for several months which eventually failed. Their divorce was finalized on November 10, 2021. Under community property rules when did their community rights over joint assets end? OA) June 10, 1997. C) November 10, 2021. B) May 10, 2021. D) December 1, 2019.
- Statement 1: Pedro died giving Juan the power to appoint a person who will inherit his house and lot. Juan however, can only choose among Ana, Lorna or Fe. Juan decided to transfer the property to Fe through the former decedent’s will. The transfer from Juan to Fe is subject to estate tax. Statement 2: During Peter’s lifetime, he decided to give John as a gift his car subject to the condition that if John does not become a CPA within 3 years, Peter shall revoke the transfer. In the second year however, Peter died. The car should form part of Peter’s gross estate. Only statement 1 is correct Both statements are correct Only statement 2 is correct Both statements are incorrectDonna Stober’s estate has the following assets (all figures approximate fair value): The house, cash, and other assets are left to the decedent’s spouse. The investment land is contributed to a charitable organization. The automobiles are to be given to the decedent’s brother. The investments in stocks and bonds are to be put into a trust fund. The income generated by this trust will go to the decedent’s spouse annually until all of the couple’s children have reached the age of 25. At that time, the trust will be divided evenly among the children. The following amounts are paid prior to distribution and settlement of the estate: funeral expenses of $20,000 and estate administration expenses of $10,000. What value is to be reported as the taxable estate for federal estate tax purposes?Several years ago, Georgia transferred $500,000 of real estate into an irrevocable trust for her son, Lee. The trustee was directed to retain income until Lee's 21st birthday and then pay him the corpus of the trust. Georgia retained the power to require the trustee to pay income to Lee at any time and the right to the assets if Lee predeceased her. What amount of the trust, if any, will be included in Georgia's estate if she dies this year when the value of the real estate in trust is $700,000? Amount to be included in Georgia's estate
- Mason buys real estate for $1,500,000 and lists ownership as follows: “Mason and Dana, joint tenants with the right of survivorship.” Mason dies first, when the real estate is valued at $2,000,000. How much is included in Mason’s gross estate if Mason and Dana are: Brother and sister? Husband and wife?Gary and Georgeann have the following objectives: If Gary predeceases Georgeann, to provide her exclusively with a mandatory stream of income from the assets included in his gross estate To ensure that Gary's children from his prior marriage will ultimately receive the income-producing assets upon Georgeann's death To prevent assets used to provide income to Georgeann from being included in her gross estate Which of the following estate planning techniques would accomplish the Gary and Georgeann's first objective of providing a mandatory stream of income? A power of appointment (A) trust A qualified terminable interest property (QTIP) (C) trust, with an election A QTIP (C) trust, without an election A) II and III B) I only C) II only D) I, II, and IIIYour supervisor has asked you to research the following situation concerning Owen and Lisa Cordoncillo. Owen and Lisa are brother and sister. In May 2019, Owen and Lisa exchange land they both held separately for investment. Lisa gives up a two acre property in Texas with an adjusted basis of $2,000 and a fair market value of $6,000. In return for this property, Lisa receives from Owen a one acre property in Arkansas with a fair market value of $5,500 and cash of $500. Owen’s adjusted basis in the land he exchanges is $2,500. In March 2020, Owen sells the Texas land to a third party for $5,800. Required: Go to the IRS website (www.irs.gov). Locate and review Publication 544, Chapter 1, Nontaxable Exchanges. Please explain and calculate the amount of Owen and Lisa’s gain recognition for 2019. Also determine the effect, if any, of the subsequent sale in 2020.