In 2001, Alejandro buys an annuity for $100,000 that will pay Alejandro an annual amount for life with survivor benefits to his wife. When Alejandro dies in the current year, a comparable contract would have cost $81,000. What amount is included in Alejandro's gross estate?

Question

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The amount included in Alejandro's gross estate is the cost of a comparable contract at the time of his death, which is $81,000.

In 2001, Alejandro Buys an Annuity for $100,000 That Will