Briana\'s adjusted gross estate is $9 million. The death taxes and funeral and a

Question

Briana's adjusted gross estate is $9 million. The death taxes and funeral and administration expenses of her estate total $1.2 million. Included in Briana's gross estate is stock in Unicorn Corporation, valued at $5 million as of the date of her death. Briana had acquired the stock six years ago at a cost of $300,000. If Unicorn Corporation redeems $1.2 million of Unicorn stock from the estate shortly after Briana’s death, the estate will recognize capital gain of:_________

Kombucha Corporation has 2,200 shares of common stock outstanding. Joshua owns 900 of the shares, Joshua's grandfather owns 100 shares, Joshua's father owns 100 shares, Joshua's ex-wife owns 700 shares, and Purplebird Partnership owns 400 shares. Joshua is a 50% partner in Purplebird Partnership. How many shares is Joshua deemed to own in Kombucha Corporation under the § 318 attribution rules?________

Explanation / Answer

1)

The value of Unicorn Corporation stock in Briana's gross estate exceeds 55.55% of the adjusted gross estate ($5M / $9M = 55.55% ) thus the transaction qualifies under sec 303 for sale or exchange treatment) Capital Gain = Amount Realised - Adjusted Basis Capital Gain = $1,200,000 - $1,200,000 $0.00 Assuming there is no change in value of stock since Briana's death so estate stock basis will be equal to death taxes and funeral and administration expenses

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