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Discuss the value of the survivorship feature

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Reference no: EM131775844

Question 1: In 2008, Jim and Maude purchase a commercial annuity. Jim furnishes 75% of the cost, and Maude provides the balance. Under the terms of the contract, Jim is to receive $48,000 per year for his life. If Jim predeceases Maude, she is to receive $36,000 per year for her life.

a. If Jim dies first when the value of the survivorship feature is $400,000, how much, if any, is included in his gross estate?

b. Would anything regarding the annuity be included in Maude's gross estate when she dies five years after Jim? Explain.

Reference no: EM131775844

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