Estate Planning Please provide little explanation with the answers. ............

Question

Estate Planning

Please provide little explanation with the answers. ...............................................................................................

1- Which of the following statements concerning the estate tax marital deduction are correct?

I. An outright bequest of property to a spouse who is not a U.S. citizen will not qualify for the marital deduction.

II. Only one-half of the value of the property held in joint tenancy WROS with a spouse at the time of the spouse’s death qualifies for the marital deduction.

III. If one-half of community property is bequeathed to a spouse, the estate receives a marital deduction equal to the full value of the community property.

IV. Property bequeathed to the decedent’s spouse and children in joint tenancy WROS will qualify for the marital deduction.

A.     I and II only

B.     II and III only

C.     III and IV only

D.     I, II and IV only

...............................................................................................

2- All the following transfers qualify for a marital deduction EXCEPT:

A. The grantor of an inter vivos irrevocable trust specified that her husband was to receive a life income from the trust assets, and the remainder would go to her children.

B. At the time of creation of a charitable remainder trust, the grantor gave a life interest in the trust assets to his wife.

C. The decedent provided in his Will for his wife to receive a life income from his estate assets, and his wife was given a general power of appointment over the property.

D. The decedent’s Will provided that if his wife died within six months of his death, the residuary would pass to his children, and not to her or to her estate.

Explanation / Answer

I. D is correct ie, following statements are correct

I. An outright bequest of property to a spouse who is not a U.S. citizen will not qualify for the marital deduction.

II. Only one-half of the value of the property held in joint tenancy WROS with a spouse at the time of the spouse’s death qualifies for the marital deduction.

IV. Property bequeathed to the decedent’s spouse and children in joint tenancy WROS will qualify for the marital deduction.

explanation :As per 26 U.S. Code § 2056 - Bequests, etc., to surviving spouse

For purposes of the tax imposed by section 2001, the value of the taxable estate shall, except as limited by subsection (b), be determined by deducting from the value of the gross estate an amount equal to the value of any interest in property which passes or has passed from the decedent to his surviving spouse, but only to the extent that such interest is included in determining the value of the gross estate.

Disallowance of marital deduction where surviving spouse not United States citizen

(1) In general

Except as provided in paragraph (2), if the surviving spouse of the decedent is not a citizen of the United States—

(A) no deduction shall be allowed under subsection (a), and

(B) section 2040 (b) shall not apply.

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