A decedent established a revocable trust 5 years before death, funding it with million. At the date of death, the trust assets were worth million. What amount is included in the decedent's gross estate?

Answer options:

million

million (appreciation only)

How to approach this question

Estate Tax Rule: If you keep control (Revocable), it's yours when you die. Included in Gross Estate.

Full Answer

C. million✓ Correct

IRC §2038 requires the inclusion of the value of any property transferred by the decedent if the decedent retained the power to alter, amend, revoke, or terminate the transfer.

Common mistakes

Thinking trusts automatically remove assets from the estate (only Irrevocable trusts do that).

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