Finc 355 - Real Estate Case Paper

as you can see from Case 2 (if you haven't read it, see attachment), Dr. Norma has a fairly good sized estate.

While the case does not say it explicitly, Dr. Norma does not appear to be currently married but appears to be a single mom.  It is not clear whether this was due to divorce or death or never having been married.

In any case, she wishes to leaver her estate to her children (three). 

We don't know if she will live a long time or a short time.  But as the case makes clear, she is looking at taxes, both estate taxes, taxes on distributions and income taxes as death or some combination of the above

THe case also points out the problem in finding liquid assets to pay the taxes and offers some considerations to ensure that they do, in fact, get taken care of in the most efficient way.

That leaves the main problem where she is asking for advice - meaning she is asking you, her advisors, how can she minimize taxes and leaver the most to her children.

Without a spouse, the unified credit is not enough to cover the estate and their is no marital deduction.  What can she do.

Your answer should be 1-2 pages depending upon how creative and what sort of research you can creatively do to come up with ways to reduce the overall tax. 

If you have two ideas that are supported by logic and facts, you will score higher than if you have one.  Three would be even better,  Four, five ..

Of course it is not just the number, the advice has to be supported. 

· Can you get any assets to the children without paying tax or paying less tax? 

· Can you invest the assets in a way so as to lower their value for taxes and yet have the long-run or permanent value to the children still be high?

· Can you create a legal structure, contract or trust so as to argue for a lower tax value, again without jeopardizing the long-run value to the children

·

I will admit that this is not an easy case nor is it something you are likely to see highlighted in the text waiting for  you to cut-and-paste.   It is more thinking like an estate

planner cum tax attorney.  Do some research and good luck.