The gross estate of john decedent includes stock in

This preview shows page 11 - 13 out of 70 pages.

We have textbook solutions for you!
The document you are viewing contains questions related to this textbook.
South-Western Federal Taxation 2020: Individual Income Taxes
The document you are viewing contains questions related to this textbook.
Chapter 4 / Exercise 51
South-Western Federal Taxation 2020: Individual Income Taxes
Young/Nellen/Hoffman
Expert Verified
63. The gross estate of John, decedent, includes stock in Crimson Corporation and Jade Corporation valued at $1.3 million and $2 million, respectively. John’s adjusted gross estate is $9 million. He owned 23% of the Crimson stock and 31% of the Jade stock. Immediate members of John’s family own the remaining shares of both Crimson and Jade. Those individuals are also the sole beneficiaries of John’s estate. Death taxes and funeral and administration expenses for John’s estate are $1.3 million. John had a basis of $475,000 in the Crimson stock and $510,000 in the Jade stock. Crimson Corporation (E & P of $3 million) distributed land worth $1.3 million (basis of $800,000) to John’s estate in redemption of all of the Crimson stock. Which of the following is a correctstatement regarding the tax consequences of this redemption? A. The estate recognizes dividend income of $1.3 million on the redemption.B. Crimson Corporation recognizes no gain on the distribution of the land.C. The estate recognizes no gain or loss on the redemption.D. The estate has a basis of $800,000 in the land. E. None of the above.
We have textbook solutions for you!
The document you are viewing contains questions related to this textbook.
South-Western Federal Taxation 2020: Individual Income Taxes
The document you are viewing contains questions related to this textbook.
Chapter 4 / Exercise 51
South-Western Federal Taxation 2020: Individual Income Taxes
Young/Nellen/Hoffman
Expert Verified
64. The adjusted gross estate of Keith, decedent, is $12 million. Included in the gross estate is stock in Gold Corporation (E & P of $1.3 million), a closely held corporation, valued at $4.6 million as of the date of Keith’s death in 2013. Keith had acquired the stock twelve years ago at a cost of $900,000. Death taxes and funeral and administration expenses for Keith’s estate are $2.3 million. Gold Corporation redeems one-half of the stock from Keith’s estate in a § 303 redemption to pay death taxes using property with a fair market value of $2.3 million (adjusted basis of $1.9 million). Which of the following is a correctstatement regarding the tax consequences of this redemption?
65. The adjusted gross estate of Debra, decedent, is $8 million. Debra’s estate will incur death taxes and funeral and administration expenses of $1 million. Debra’s gross estate includes stock in Silver Corporation that she had purchased twelve years ago for $600,000 (date of death fair market value of $3 million). At the time of her death in 2013, Debra owned 80% of the stock in Silver Corporation. Silver Corporation (E & P of $4 million) redeems all of the estate’s stock in the corporation for $3 million. Debra’s will names her daughter, Dena, who owns the remaining 20% interest in Silver Corporation, as her sole heir. With respect to this redemption, Debra’s estate has the following income:

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture