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cupoosta [38]
3 years ago
8

Abe and Jan are well to do and are concerned that the estate tax exemption of $10,500,000 (combined) will not be sufficient to a

void estate taxes. The have 3 married children and 7 grandchildren. They would like to give about $300,000 per year to their children and grandchildren, but do not want to pay any gift tax or reduce their lifetime gift and estate tax deduction. They also do not want the young children to be in control of the money. They have heard about the Crummey powers and ask you if that would be the solution to their situation. Research the Crummey rules and recommend to Abe and Jan what to do.

Business
1 answer:
Alinara [238K]3 years ago
7 0

Answer:

Please see attachment

Explanation:

Please see attachment

You might be interested in
When Padgett Properties LLC was formed, Nova contributed land (value of $358,500 and basis of $89,625) and $179,250 cash, and Os
lawyer [7]

Answer:Amount of Nova and Oscar's gain=$492,937.50

Explanation:

a)According to  Land recorded for   § 704(b) book capital account purposes, Land is  recorded at fair market value. With this, the Padgett properties should record the land at $358,500

b)From the question, it is given that the  basis of land is  $89,625. Therefore, the Padgett Properties LLC's tax basis in the land is $89,625.

c)Amount of Nova and Oscar's gain.

Fair market value of Land         $358,500

Basis of land                                  $89,625  

total                                              $ 448,125

but Gain =  Selling price of land - Fair value of Land  x interest in partnership profits and capital  

= $537,750 - ($358,500+$89,625 )

=($537,750 - $448,125 )  x 50% =$44,812.50

Total gain                   $448,125 + $44,812.50 =$492,937.50

4 0
3 years ago
The closing entry process consists of closing:A)all asset and liability accounts.B)out the Retained Earnings account.C)all perma
allochka39001 [22]

Answer:

D.) All the temporary accounts

Explanation:

The closing entry process closes or "zeroes out" the temporary accounts and transfer their balances to the retained earnings account.

Theses temporary accounts are closed or reset at the end of every year. Companies also call this as the closing of the books.

Temporary accounts includes:

1. Revenue & Gain Accounts

2. Expenses & Losses Accounts

3. Dividends & Withdrawal Accounts

4. Income Summary accounts (if used)

8 0
3 years ago
A special tax was levied by Downtown City to retire and pay interest on general obligation bonds that were issued to finance the
jonny [76]

Answer:

C. Debt Service Fund.

Explanation:

Dept service funds can be described as monies or reserves which are been used to pay for capitals, interest and certain dept that have accrued by the company and it can cover for any other form of dept owed by the company.

It's existence is put in place to reduce the risk of a debt security for future investors. This can be paid out monthly mid-monthly, quarterly or possibly yearly.

This why the tax on general obligation bonds that has been put upon Downtown city to finance the hall has it receipts in place at the dept service fund office.

5 0
3 years ago
On January 2, 2020, Vaughn Manufacturing began construction of a new citrus processing plant. The automated plant was finished a
12345 [234]

Answer:

Vaughn Manufacturing

1. The weighted-average accumulated expenditures for 2017 were:

c. $1,200,000.

2. The interest capitalized for 2017 was:

b. $144,000

3. The weighted-average accumulated expenditures for 2018 by the end of the construction period were:  

= $2,546,000.

4. The interest capitalized for 2018 was:

= $267,000.

Explanation:

a) Data and Calculations:

Expenditures for the construction were as follows:

Date                                   Amount of     No. of months  Weighted Average

                                         expenditure                                 Expenditure

2020:

January 2, 2020                 $613,000         12/12                     $613,000

September 1, 2020            1,802,400          4/12                       600,800

December 31, 2020          1,802,400          0/12                        0

Total weighted-average expenditure for 2020 =                $1,213,800

Which is approximately = $1,200,000

Interest capitalized = $144,000 ($1,200,000 * 12%)

Capitalized expenditure by December 31, 2020 = $1,344,000 ($1,200,000 + $144,000)

Date                                   Amount of     No. of months  Weighted Average

                                         expenditure                                 Expenditure

2021:

January 1, 2021                 1,344,000        9/9                   $1,344,000

March 31, 2021                  1,802,400       6/9                      1,201,600

September 30, 2021        1,203,000        0/9                      0

Total weighted-average expenditure for 2020 =           $2,545,600

Which is approximately $2,546,000

Interest capitalized for 2018 = $267,330 ($2,546,000 * 10.5%)

Approximately $267,000

7 0
3 years ago
g The Work in Process Inventory account of a manufacturing company that uses an overhead rate based on direct labor cost has a $
poizon [28]

Answer:

200% of direct labor cost

Explanation:

The computation of the company overhead application rate is shown below;

But before that overhead cost would be determined

GIP = Direct material + Direct labor + Overhead

$4,400 = $2,000 + $800 + Overhead

So,

Overhead = $4,400 - $2,000 - $800

= $1,600

Now the overhead application rate is

= overhead ÷ direct labor cost

= $1,600 ÷ $800 × 100

= 200%

6 0
2 years ago
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