Question

Marcia Miller died July 23, 2017. Marcia (born April 2, 1930) resided at 117 Brandywine Way, Eastern City, PA 19000 and was a lifelong Pennsylvania resident. Her first husband, Arthur Adams, died in 1999. In June 1999, she married Matt Miller, a U.S. citizen, who survived her. Marcia has three children (Andy, Annie, and Archie Adams) from her first marriage.

Date of death values of the properties discovered at Marcia’s death are listed below.

Principal residence with a value of $420,000. Purchased by Marcia in 2001 and titles in the names of Matt and Marcia Miller, joint tenants with right of survivorship.

Household furnishings acquired by Marcia during her first marriage and values at $62,000 when she died.

$1 million cash in money market account in Marcia’s name. On her date of death, there also was $2,200 of accrued interest in the account.

$17,000 checking account at Keystone State Bank in the names of Marcia and Matt as tenants in common.

Stock portfolio in Marcia’s name with fair market value at her death of $5.6 million.

$1 million like insurance policy. Marcia purchased the policy in 1990 and held incidents of ownership. Beneficiary is Marcia’s estate, and Marcia held incidents of ownership.

Trust at Quaker State Bank with value of $500,000. The trust was created under the will of Marcia’s uncle, Josh Judson, who died in 1992. Marcia was entitled to receive all the income annually for life and was granted the power to will the property to such of her descendants as she so desired with the specification that, if she did not exercise the power, the property would pass to Josh’s Former housekeeper, Yvonne Jones.

Marcia’s will includes the following provisions:

I bequeath to Matt all of my tangible, personal property.

To First Lutheran Church I leave $50,000.

To a trust with PHL Bank I leave $200,000. Matt is to receive all the trust income quarterly for life, and the remainder is to be divided equally at his death among my three children or their estates.

I leave my sister Annette $100,000, but if she disclaims this amount, it will go to my beloved Matthew.

I appointed the property on the trust at Quaker State Bank to Annie Adams.

The rest of my property I leave to Andy (my first born).

Other pertinent information follows:

As of her date of death, Marcia owed her country club $800.

The cost of Marcia’s funeral and tombstone totaled $15,000.

Her accountant’s, attorney’s, and executor’s fees are estimated to be $120,000.

Annette made a qualified disclaimer of the $100,000 bequest.

Marcia’s executor, Susan, will make whatever elections will result in the lower tax payable. During her life, Marcia never made any taxable gifts and never consented to gift splitting.

Assume that, under state law, taxes and nay other costs associated with death are payable from the estate’s residue and that the state death tax owed is equal to the state death tax credit available on the federal estate tax return.

Prepare an estate tax return (Form 706) for Marcia. You will also need to prepare the following sub-schedules for Marcia:

B, C, D, E, F, J, K, M, O (These forms all need to be downloaded from the IRS website and the numbers must be manually loaded into the forms and then printed).

Answer 1

Estate tax return (Form 706) for Marcia is as follows

Particulars	Amount $
Principal residence	4,20,000
Add: Household Furnishings	62,000
Add: Cash in money market account	10,00,000
Add: Accrued interest in the account	2,200
Add: Checking account at Keystone State Bank	17,000
Add: Stock portfolio	56,00,000
Add: Life insurance policy	10,00,000
Add: Trust at Quaker State Bank	5,00,000
Less: owed to country club	800
Less: cost of Marcia’s funeral and tombstone	15,000
Less: Accountant’s, attorney’s, and executor’s fees	1,20,000
Total amount of Estate available	84,65,400