They entitle a surviving spouse to some portion of the
decedent’s estate, even though the decedent may have willed
a smaller portion to this person.
Chapter 22, Exhibit 20a
Dower and Curtesy
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Dower and Curtesy
Dower
entitles a surviving wife to a portion of real property
her husband owned and possessed during their marriage.
Curtesy
entitles a surviving husband to a life estate in all of his
wife’s land if they had children.
Chapter 22, Exhibit 20b
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Dower and Curtesy
Dowers and curtesies, although included in the gross estate
of a decedent spouse, are “zeroed out” of the decedent
spouse’s taxable estate by the marital deduction.
Unless the
property is “consumed” by the surviving spouse, it is
included in the surviving spouse’s taxable estate at fair
market value on the date of death (or the six-month
alternative date.)
Chapter 22, Exhibit 20c
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Valuing the Gross Estate
Date of death.
Value is the fair market value (FMV) of
the property at date of death unless a special valuation
rule is used. Real property is usually valued at its
highest and best use.
Chapter 22, Exhibit 21a
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Valuing the Gross Estate
Alternative valuation date.
The executor may elect to value
the estate at an alternate valuation date, which is 6 months
after the date of death. If the election is made and property
is distributed before the 6-month date, then the value on the
day after the date of distribution will apply.
Thus, there are
3 possible dates for valuing an estate:
Date of death, or,
If elected by executor (not heir), the earlier of:
(a)
6 months after date of death, or
(b)
Date received by heir if before 6 months.
Chapter 22, Exhibit 21b
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Valuing the Gross Estate
The alternative valuation date carries three requirements:
It is irrevocable.
It applies to all property of the estate (i.e., the
executor cannot “pick and choose” which property to
elect).
It can be made only if it results in a reduction in
BOTH the value of the GE and the sum of estate tax
and the generation-skipping transfer tax.
Chapter 22, Exhibit 21c
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Deductions from the Gross Estate
Examples.
Deductions are subtracted from the gross estate
(GE) in computing the taxable estate (TE). Typical expenses
include: funeral expenses, administrative expenses, debts of
the decedent, claims against the estate, casualty losses and
allocations of deductions on returns.
Funeral Expenses.
Deductible from the GE, even if they if
incurred in a foreign country, or if they go beyond the
“necessary.”
Chapter 22, Exhibit 22a
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Deductions from the Gross Estate
Administrative Expenses.
These include fees paid to the
executor, lawyer, accountant, and appraiser.
They are
deductible if:
Allowable by local law; and
Necessary for administering the estate (i.e., for selling or
