[LO 12.4] When Godfrey died in 2016, his assets were valued as follows:AssetDate of death...

Question

[LO 12.4] When Godfrey died in 2016, his assets were valued as follows:

Asset	Date of death valuation	Valuation six months later
Stocks	$2,220,000	$2,180,000
Bonds	4,600,000	4,620,000
Home	800,000	780,000
Total	$7,620,000	$7,580,000

The executor sold the stock two months after the decedent's death for $2,200,000. The bonds were sold seven months after the decedent's death for $4,630,000. What valuation should be used for the gross estate?

Prepare a 350- to 700-word (APA Style format) document that addresses and includes the amount of taxable estate for each of the following:

Address the question at the end of the scenario.
If Godfrey came to you before his death and told you that he had a spouse and two children under the age of 18, what kind of estate plan would you suggest for him?
What if Godfrey had no spouse but had two children under the age of 18?
What if Godfrey had no spouse or children, but had a favorite niece?

Robert · Accepted Answer

The first task is to determine the gross estate based on the data provided. In this 
regards, it is noteworthy that for the estimation of the gross estate, the fair value of the 
various assets at the date of death must be used. However, in case, that there is a sale of asset 
which tends to transpire within a period of six months from the date of death, then the selling 
price of the underlying asset would be used for the computation of the gross estate. Using the 
above understanding and the given data, the gross estate calculation is as shown below.
Based on the above computation of the gross estate, the taxable amount needs to be 
determined for the following three cases. 
Scenario 1: Godfrey has spouse and also two children below 18 
In order to avoid or minimise estate taxes, it is essential that appropriate test planning 
must be done. Thus, it is advisable that trust shall be created for the management of the above 
assets. However, with regards to creation of trust, there are two choices i.e.

[LO 12.4] When Godfrey died in 2016, his assets were valued as follows: Asset Date of death valuation Valuation six months later Stocks $2,220,000 $2,180,000 Bonds 4,600,000 4,620,000 Home 800,000...

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