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Estate Tax Case Study Marcy

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Since Marcy is wealthier than her sick husband she should consider gifting her property to her ill husband, Phil. In that way Phil’s estate is good enough for the estate tax exemption equivalent provided by the unified credit, or else it will be wasted. Marcy’s gift to her husband would be considered tax-free because of the unlimited marital deduction. In the event Phil would die, no estate tax would be payable because his estate tax liability will not exceed the unified credit. Moreover, Phil must not transfer the assets/property back to Marcy at death, so that he can take full advantage of his unified credit, otherwise his unified credit would be wasted.

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