Reference no: EM131926301

Ellen Younger died on December 17, 2013 at the age of 81. She lived at 12 N. 24th Street, Omaha, NE 68111 with her husband, John (nicknamed Jack). She is survived by Jack, who is 79 years old. The couple had four children: Cynthia, age 57, who lives in Boston, MA, John Jr., age 54, who lives in Omaha, Terri, age 51, who lives in Des Moines, IA and Timothy, who is now deceased. Timothy is survived by his wife, Rikki and two sons. Ellen had the following assets (all in her own name unless noted otherwise): 1) A jointly held personal residence with her husband, Jack (as tenants by the entirety). The house was purchased jointly by the two in 1994 for $65,000. Its current fair market value has been appraised at $215,000. 2) A commercial building, currently occupied by a business called “Fuzzy’s Lounge” at 4024 North 24th Street, Omaha, NE. An appraisal of the date of death value showed the building to be worth $750,000. However, the building is encumbered by a mortgage of $200,000. 3) 2,000 shares of Apple, Inc. 4) 10,000 shares of Microsoft, Inc. 5) 3,000 shares of Google, Inc. 6) A 50% ownership stake in Ellen’s Tasers, Inc. The company has a total appraised value of $8,500,000. 7) A joint bank account with First Omaha Bank (account# 12345678) with Jack, worth $500,000. 8) An IRA (account #87654321) worth $500,000. Jack is the named primary beneficiary. 9) A joint savings account at Prudential Bank with her daughter, Cynthia, worth $300,000. This money was contributed by Ellen. 10) A personal savings account worth $400,000. 11) A personal checking account worth $3,000. 12) An art collection, worth $750,000. 13) Jewelry and personal effects worth $50,000. Assume all valuations are for December 17, 2013. After some research, you decide to use this date and NOT an alternate valuation date. Ellen dies with a valid Will that stated, in relevant part, as follows: A. I direct that, upon my death, my executor make the following charitable contributions from my estate: a. $500,000 to the American Cancer Society. b. $500,000 to the United Way B. Although I love my husband Jack very much, I am cognizant that he is independently wealthy. I therefore leave him the sum of $1,000,000 from my estate, but nothing beyond that. Instead, I leave all of my assets to my children, in equal shares, per stirpes. The following expenses were incurred in the administration of Ellen’s estate: - Funeral expenses: $10,000 - Attorney’s fees: $75,000 - Accountant’s fees: $15,000 - Appraisals of the real estate and businesses: $2,500 Ellen died owing the following debts: - $100,000 on a note to Second Bank of Nebraska. - $50,000 to her brother, Jim, who had lent her the money years ago but had forgotten to ask for it back. Based on this information and making whatever reasonable assumptions you need to make, please prepare the federal estate tax return (form 706) for Ellen’s estate.