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Estate Final

B there are two rules to 2042 insurance policy

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b) There are two rules to § 2042. Insurance policy proceeds on a decedent's life are included in the insured's gross estate if they are (1) receivable by the executor or (2) receivable by other beneficiaries and the decedent had any incidents of ownership in the policy at death. Whatever amount is paid to Burton’s estate is included in his estate under § 2042. c) Since Burton has taken out and has paid for a policy on his life and then later assigns it to others while retaining a mere right to substitute beneficiaries, § 2042(2) will tax Burton’s estate on the proceeds upon his death. Again, Insurance policy proceeds on a decedent's life are included in the insured's gross estate if they are (1) receivable by the executor or (2) receivable by other beneficiaries and the decedent had any incidents of ownership in the policy at death. Whatever amount is paid to Burton’s estate is included in his estate under § 2042. d) Due to the fact that Burton releases the power to change beneficiaries one year before his death, the property is not included under § 2042. This scenario will fall under § 2035(a). This code section requires that property be pulled back into Burton’s gross estate since there is a transfer of an interest in property / the relinquishment of a power with respect to property inclusion and the transfer or relinquishment is was made within three years of death for less than adequate and full consideration in money or money's worth.
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3. a) Linda never received any consideration for the note so based on § 2053(c)(1), there would be no deduction allowed on this claim. § 2053(c)(1) states that there is a s significant limitation on the deduction for a claim against the estate stating that the claim “founded on a promise or agreement” is deductible only to the extent that it was contracted in good faith and for an adequate and full consideration in money or money's worth. b) Usually, since Saleha is the sole owner of property, the value of the property will be included in Saleha’s gross estate; however since the property in question here are cemetery lots, IRS regulations state that cemetery lots owned by a decedent are not included in the decedent’s gross estate if designed for the decedent and members of the decedent’s family. c) The executor of Stanley’s estate will be able to deduct these income taxes once they are paid. § 2053 specifies that pre-death taxes that are deductible may only be deductible as administrative expenses when paid. When Income taxes are earned before death, they are deductible claims against the estate as long as they are obligations of the decedent at the time of the decedent’s death. 4. a) Under § 2033, all of Tract A, $1,000,000 will be included in Jerome’s gross estate due to the fact that Jerome owned all of the property. As for the $200,000 mortgage paid, this amount can be taken as a deduction under § 2053. Under code section § 2056(b)(4)(B), $800,000 will qualify for the marital deduction. Section § 2056(b)(4)(B) states that only the net value of Tract A will qualify for the marital deduction. For the amount from Tract B, the estate will be allowed a marital deduction of $700,000. This is due to the fact that the encumbrance on property
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b There are two rules to 2042 Insurance policy proceeds on...

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