Prepare an estate tax return (Form 706) for Adam Zugg of 45 Cornfield Place, Midwest City, IL, 60000. Adam died October 31, 2014. He was survived by his wife, Callie, and their son, Zebulon. At the time of his death, Adam was employed by a farm equipment distributor as its office manager. The executor reports that he has discovered the property listed below.

Checking account, Adam and Callie, joint tenants with right of survivorship                

Stocks in public companies in the name of Adam

Undeveloped land (not leased or farmed) in the name of Adam

Qualified retirement plan funded by Adam’s employer

Face value of term life insurance policy on Adam’s life

Automobile in Adam’s name

 

$10,200

1,300,000

4,400,000

800,000

2,000,000

22,000

 

Other information includes the following:

1.     Adam owned the life insurance policy, and his estate beneficiary.

2.     Callie is the beneficiary of the retirement plan.

3.     Adam willed his stocks to Callie and the rest of his property to Zebulon.

4.     Adam owned $13,200 on a car loan.

5.     The estate’s administrative expenses were $32,000, and his funeral expenses were $8,000.

6.     Assume that the estate paid stated taxes of $45,000.

7.     Adam made his only taxable gift, $6 million in amount, in December 2013 and paid all the gift taxes from an account solely in his name.

8.     Assume the estate’s marginal income tax rate will be 33%.

 

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