Mary, a widow, died in 2022. Her personal representative filed a federal estate tax return showing...

Question

Mary, a widow, died in 2022. Her personal representative filed a federal estate tax return showing the following:

Gross estate

$4,000,000

Funeral and administrative expenses

$80,000

Unsecured debts due at death

$120,000

Casualty losses ineligible for insurance reimbursement

$50,000

Adjusted gross estate

$3,750,000

Marital deduction

$100,000

Charitable deduction (not cash)

$250,000

State death taxes

$25,000

Taxable estate

$3,375,000

Adjusted taxable gifts

$325,000

Tax base

$3,700,000

Tentative tax

$1,425,800

Applicable Credit Amount

$4,769,800

Net estate tax due

$0

Based on this information, which one of the following amounts most closely approximates the cash requirements for Mary's estate?
A)
$600,000
B)
$275,000
C)
$80,000
D)
$250,000
 
 
 
Rhonda owns the following assets:

A residence owned with her husband as joint tenants with right of survivorship
A solely owned closely held business that comprises one-half of the value of her large estate
A large collection of antique figurines

Rhonda's will bequests $10,000 to her only niece and leaves the balance of her estate to her husband if he survives her. Because Rhonda can no longer obtain life insurance, she is looking for other methods to provide the liquidity needed for her estate.
Which of the following actions would have the potential to improve the liquidity of Rhonda's estate?

Retitling the residence she owns with her husband as tenants by the entirety
Selling or giving away the antique figurines
Eliminating the bequest in her will to her niece
Her husband could waive the executor fees

A)
I, II, and III
B)
III and IV
C)
II, III, and IV
D)
I and II

Rochak · Accepted Answer

Answer 1: 
D) $250,000
Cash Requirements = Gross Estate – Adjusted Gross Estate
= $4,000,000 - $3,750,000
= $250,000
Answer 2:
D) I and II
Explanation: Rhonda’s can do the following action to improve the liquidity of Rhonda’s estate which are:
1. Retitling the residence,

Mary, a widow, died in 2022. Her personal representative filed a federal estate tax return showing the following: Gross estate $4,000,000 Funeral and administrative expenses $80,000 Unsecured debts...

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