[startupcfo]

See SIM#69

The decedent dies on April 1st, so the alternate election date is 6 months later on October 1st. There are 2 bonds, and the question is

how much of the accrued interest is included in the taxable estate

.

The first bond is

$200,000 Zenon Corp. 3% 20-year bonds, due Year 16.
Interest payable quarterly on February 1, May 1, August 1,
and November 1.

I calculate this to be $500/month in interest

The second bond is

$320,000 Vision Corp. 5% 15-year bonds, due Year 13.
Interest payable quarterly on January 1, April 1, July 1,
and October 1.

I calculate this to be $1,333/month in interest.

Answers given are $1,000 for the first bond and $4,000 for the second bond, but this SIM gives zero rationale as to how it came up with those numbers.

BEC - 87 | 02/28
REG - 70 | 06/10, REMATCH | 08/30
AUD - XX | 09/10
FAR - XX | 12/10

[atabiaka]

Is there any other info? Like whether bonds where at face value or not?

Have you found the solution? Really interested in solving this too.

[startupcfo]

The answers are in my original post, but not the rationale. Somebody put up the Bat sign

BEC - 87 | 02/28
REG - 70 | 06/10, REMATCH | 08/30
AUD - XX | 09/10
FAR - XX | 12/10

[atabiaka]

I figured it out. Estate tax is a value at The day of death or 6 months later. But 6 months later of the same amount. Interest income will go to estate income tax return. Thus we have feb and March accrued income for bond 1 and and Jan, Feb, March for bond 2. Which is 1000 and 4000 respectively.

[Author]

Replies