Joan, a widow, died on January 15, 2019. At her death Joan owned many assets with the following FMV at DOD (fair market value at time of death):savings account $2,350,000checking account $3,000California tax exempt municipal bonds $1,000,00010,000 shares of Cisco stock [the high and low for the Cisco share on DOD (date of death) was $19 and $21]A thoroughbred horse named George appraised at DOD for $900,000 but the executor of the estate was only able to sell it at the Kentucky yearly thoroughbred auction on February 20, 2019 for $500,000.residence $6,500,000, which is subject to a mortgage of $300,000joint and survivor checking account with her son John in which she contributed all the funds $50,000personal and household goods $15,000Joan was a beneficiary of a testamentary trust created under the will of her late uncle George, pursuant to which she was entitled to income for life from the trust payable at least annually and over which she had a power to appoint the entire trust assets in favor of anyone. The value of the trust corpus at Joan’s DOD equals $1,000,000.In June of 2008 Joan created an irrevocable trust with $500,000. She was the income beneficiary for 10 years and the remainderman was her nephew Jimmy. The value of the trust at Joan’s DOD was $4,500,000 (Use Table B Term Certain for assumed 4% rate in June of 2008…(actual IRC 7520 rate was 3.8%)) (Hint: possible prior taxable gift?).Joan transferred her $500,000 term life insurance on her life into an irrevocable insurance trust in December of 2016. The yearly insurance premium did not exceed the Section 2503 exclusion. (Watch for Section 2035(a))Joan was the income beneficiary for her life of a trust created by her Uncle Tom. The remainderman was her nephew Jimmy. The value of the trust $300,000.Joan owned whole life $300,000 insurance policy on the life of her son John. At the time of her death the replacement value is $20,000. John is still alive.Joan owned single annuity for her life. During her lifetime she received $12,000 per year.funeral and administrative expenses $25,000charitable donation to Rady Children’s Hospital $100,000her will provides that all her estate is to pass to John. a. Calculate Joan’s taxable estateAny kind of help and guidance would be greatly appreciated. Thank you!
FMV at DOD
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