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assignment 3




Question;30. LO.1 Barry creates a;trust with property valued at $7 million. Under the terms of the trust;instrument, Michelle (age 48) receives a life estate, while Terry (age 24);receives the remainder interest. In the month the trust is created, the;interest rate is 4.4%. Determine the value of Barry's gifts.;39. LO.4 Jacob gives stock (basis of $900,000 and;fair market value of $2.2 million) to Mandy. As a result of the transfer in;2013, Jacob paid a gift tax of $90,000. Determine Mandy's gain or loss if she;later sells the stock for $2.3 million.;43. LO.5 Bill and Ellen are husband and wife with;five married children and eight grandchildren. Commencing in December 2013;they would like to transfer a tract of land (worth $1,008,000) equally to their;children (including spouses) and grandchildren as quickly as possible without;making a taxable gift. What do you suggest?;5. LO.6 Last year Christian sold a tract of land;(basis of $1 million) to Kate (an unrelated party) for $4 million, with a cash;down payment of $1 million and notes for the balance. The notes carry a 7.5%;rate of interest and mature annually at $1 million each over three years.;(Christian did not elect out of the installment method.) Before any of the;notes mature and when they have a fair market value of $2.8 million, Christian;gives them to Grace.;a. Disregarding the interest element, what are the;Federal income tax consequences of the gift?;b. Suppose that instead of making a gift;Christian dies and the notes pass to his estate. The executor sells the notes;for $2.8 million. What is the Federal income tax result?;49. LO.8 In each of the following independent;situations, what bypass (exclusion) amount is available to Ava's estate when;she dies in 2013? Assume that any appropriate procedures are followed, and that;elections are made to transfer to Ava any DSUE amount of Al, her deceased;husband.;a. Al died in 2009 and never used any of his;bypass amount.;b. Al died in 2011 and did not use any of his;bypass amount.;c. Same as part (b). Ava remarried in 2012, and;Andy, her second husband, had used $1 million of his bypass amount in making;past taxable gifts. Andy predeceases Ava in late 2013.;*Please complete each problem on a separate tab in;the Excel worksheet.;Decision-Making Problem;Refer to Corporations, Partnerships, Estates;Trusts Problem 24 on pages 19-35.;This Assignment will assess your understanding of;how to facilitate a lifetime transfer in trust. You are required to write a;1-page letter to Mike Edwards recommending a course of action for the given;scenario. Be sure to cite any applicable codes or regulations. Submit your;letter in a Microsoft Word document with your name in the title.;24. LO.6 Charles Horn wants his daughter Sharon to;get stock that he owns in Crimson Corporation. He acquired the stock two years;ago at a cost of $800,000, and it currently has a fair market value of;$650,000. Charles has made prior taxable gifts and is in poor health. He seeks;your advice as to whether he should gift the stock to Sharon or pass it to her;under his will. Charles has a large capital loss carryover and has no prospect;for any capital gains.;Decision Making;Communications;a. Write a letter to Charles regarding the tax;implications of the alternatives he has suggested. His address is 648 Scenic;Drive, Chattanooga, TN 37403.;b. Prepare a memo for your firm's files on this;matter.


Paper#40663 | Written in 18-Jul-2015

Price : $34