The value used to include property in the gross estate for tax purposes is which of the following?

The value used to include property in the gross estate for tax purposes is which of the following?

• A. Bequests
• B. Gifts
• C. Inheritances
• D. Fair Market Value

Answer: (C)

The main idea here is how property is valued for the estate tax calculation. For gross estate purposes, you include everything the decedent owned or controlled at death, and you value it at its fair market value on the date of death. That FMV sets the size of the gross estate and determines how much, if any, may be subject to estate tax. Bequests, gifts, and inheritances describe transfers of assets to others—the outcomes after death or during life—not how the estate is measured for tax purposes. An inheritance, for example, is what a beneficiary receives, while the amount included in the gross estate is based on the decedent’s own property value at death. So the value used to include property in the gross estate is the fair market value.

The main idea here is how property is valued for the estate tax calculation. For gross estate purposes, you include everything the decedent owned or controlled at death, and you value it at its fair market value on the date of death. That FMV sets the size of the gross estate and determines how much, if any, may be subject to estate tax.

Bequests, gifts, and inheritances describe transfers of assets to others—the outcomes after death or during life—not how the estate is measured for tax purposes. An inheritance, for example, is what a beneficiary receives, while the amount included in the gross estate is based on the decedent’s own property value at death. So the value used to include property in the gross estate is the fair market value.