M3 discussion on why is it important for an estate tohave cash and why should selling an estate'sassets to generate the liquidity necessary for theestate taxes generally be the last option? Also,how can an individual potentially reduce themedical expenses to be paid by his estate, Discussat least three common administration costs of anestate. How can an ILIT be used to generateliquidity for an estate without requiring the valueof the ILIT to be included in the decedent's grossestate? Also, what are the requirements forelecting the alternate valuation date and whywould an executor chose it?

Here discuss about the details of estate tax and its important for the cash liquidity and the…

discussion on why is it important for an estate to have cash and why should selling an estate's assets to generate the liquidity necessary for the estate taxes generally be the last option? Also, how can an individual potentially reduce the medical expenses to be paid by his estate, Discuss

discussion on why is it important for an estate to have cash and why should selling an estate's assets to generate the liquidity necessary for the estate taxes generally be the last option? Also, how can an individual potentially reduce the medical expenses to be paid by his estate, Discuss

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter27: The Federal Gift And Estate Taxes

Section: Chapter Questions

Problem 6DQ

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Concept explainers

Loanable Funds Theory

The loanable funds theory is a neoclassical theory that determines the interest rate where the demand for loanable investments and supply of loanable funds intersect. To determine the interest rate, this theory employs linear regression and a demand curve. At the equilibrium point, demand for borrowings and demand for the issuance of borrowing funds are inextricably linked. This point of equilibrium should equalize demand and the supply of money available for borrowing.

Question

discussion on why is it important for an estate to
have cash and why should selling an estate's
assets to generate the liquidity necessary for the
estate taxes generally be the last option? Also,
how can an individual potentially reduce the
medical expenses to be paid by his estate, Discuss
at least three common administration costs of an
estate. How can an ILIT be used to generate
liquidity for an estate without requiring the value
of the ILIT to be included in the decedent's gross
estate? Also, what are the requirements for
electing the alternate valuation date and why
would an executor chose it?

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Accounting When you dispose of a property and end up with a gain or a loss, it may be treated in one of 2 ways. What are they? When you dispose of personal-use property, you usually do not have a capital gain. Why not? To calculate any capital gain or loss, you need to know the following 3 amounts: the proceeds of disposition the adjusted cost base (ACB) the outlays and expenses incurred to sell your property Using these three amounts, what is the formula to calculate your capital gain or loss? 4. Capital Gains are reported on Schedule 3. What line does the sale of Personal Use Property go on?
Which of the following techniques is commonly used in estate planning to minimize estate taxes? A) Gifting assets to family members shortly before death B) Establishing a trust for beneficiaries C) Transferring assets into a taxable brokerage account D) Not creating a will or estate plan
Which one of the following NOT a correct matching of a concept associated with liquidity planning with its description? A) Forced liquidation—estate shrinkage that occurs when the decedent’s personal representative must sell estate assets, usually at less than market value, to make up for a cash deficiency B) Estate debts—the money that the decedent’s personal representative must spend to pay the decedent’s lifetime obligations that had not been paid at the time of the decedent’s death C) Estate liquidity—the decrease in the value of a decedent’s estate from the time of the decedent’s death until the time of the ultimate distribution to the decedent’s devisees, legatees, and heirs D) Estate administrative expenses—the money that the decedent’s personal representative must spend to collect the decedent’s assets; pay claims of the estate; and distribute the remaining assets to the decedent’s devisees, legatees, or heirs
In an estate, which of the following is charged to income rather than to principal? Choose the correct.a. Funeral expenses.b. Investment costs.c. Property taxes.d. Losses on the sale of investments.
Which of the following items is not charged against the income of an estate? a. Ordinary repairs to income-producing property b. Expenses incurred to protect income flow c. Loss on the sale of an estate asset d. All of the above are charged against the income
If after paying debts and expenses, the estate principal is not adequate to satisfy the various legacies, the legacies are satisfied to whatever extent possible through the: a. probate process. b. a property devise. c. abatement process. d. legacy process.
In an estate, which of the following is charged to income rather than to principal? Funeral expenses. Investment costs. Property taxes. Losses on the sale of investments.
What is the process of abatement? Select one: a.The establishment of how the creditors will be paid. b.Payment of the claims of creditors. c.An attempt to determine the deceased's intentions when the terms of the will are unclear. d.Selling of assets included in an estate to be able to pay creditors. e.A reduction of various bequests when the estate is not adequate to satisfy them completely.
Under what circumstances does an estate have an executor? Select one: a.When the estate exceeds the dollar amount of the estate tax exemption. b.When the will establishes a trust fund. c.When there is no valid will. d.When the will is contested. e.When the will names a specific person to administer the estate.
Statement I: An estate represents the assets of a deceased person after all liabilities and taxes are deducted. Statement II: Real estate planning is the process of developing a plan to administer and distribute assets in a manner consistent with the desires and needs of a deceased person's beneficiaries. Statement II is true. Statement I is true. Statements I and II are false. Statements I and II are true.
Please show your solution or explaination. Thank youuu!!Subject: Estate taxation
Which of the following would not be included in the corpus or principal of an estate? a. accrued interest and declared dividends on investments held by decedent b. personal valuables c. life insurance proceeds where designated beneficiary is the estate d. all of the above are included