ExpertMedium1 markMultiple Choice
CPA · Question 59 · Area 4: Entity Taxation
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?
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:
A.
0
B.
million
C.
million
D.
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
million
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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