What are the estate tax consequences in the following independent cases involving commercial annuities? H and...

What are the estate tax consequences in the following independent cases involving commercial annuities? H and W are married. H purchased a joint and survivorship annuity for $500,000. When H died the present value of W's annuity was $300,000. Same as (a) except W died first and the value of H's remaining annuity was $250,000. Same as (a) except that the annuity was paid for by W's employer. Same as (b) but the policy was purchased with community property. H and W each purchased a single life annuity for $250,000. H died first, several years before W. How would the answers above change if the annuities involved were private annuities?

Solutions

Expert Solution

Estate tax consequences will result due to death of H. When H died the present value of W's annuity was $300,000.Hence, the estate tax consequences will now be calculated on the present value of W's annuity of $ 300,000

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Same as (a) except W died first and the value of H's remaining annuity was $250,000.

The estate tax consequences will now be calculated on the value of H's remaining annuity of $250,000.

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Same as (a) except that the annuity was paid for by W's employer.

The estate tax consequences will still be calculated on the present value of W's annuity of $ 300,000

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Same as (b) but the policy was purchased with community property.

Since the policy was purchased with the community property, there will be no incidence of estate taxes.

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H and W each purchased a single life annuity for $250,000. H died first, several years before W.

The estate tax consequences will now be calculated on the value of H's remaining annuity of $250,000.

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How would the answers above change if the annuities involved were private annuities?

There will be no change in the answers above.

jeff jeffy answered 3 months ago

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