Under Rowena’s will, Mandy (Rowena’s sister) inherits her property. One year later, Mandy dies.

Under Rowena’s will, Mandy (Rowena’s sister) inherits her property. One year later, Mandy dies. Based on the following independent assumptions, what is Mandy’s credit for the tax on prior transfers?

a. The estate tax attributable to the inclusion of the property in Rowena’s gross estate is $700,000, and the estate tax attributable to the inclusion of the property in Mandy’s gross estate is $800,000.

b. The estate tax attributable to the inclusion of the property in Rowena’s gross estate is $1,200,000, and the estate tax attributable to the inclusion of the property in Mandy’s gross estate is $1,100,000.

Expert Solution

A.

Since the sisters died within the interval of 2 years, M will receive a 100% credit of the lesser of the two estates. In this case, it would be R’s gross estate (700,000).

B.

M will receive a 100% credit of the lesser of the two estates. In this case, it would be M’s estate (1,100,000).

This would change the answer, within 7 to 8 years difference in death, M would only receive a 40% credit rather than the 100% credit.

A.

Since the sisters died within the interval of 2 years, M will receive a 100% credit of the lesser

Junaid answered 2 years ago

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