Sally's will passes real estate to Otto (her surviving husband). The real estate is worth $8,000,000 but is subject to a mortgage of $2,000,000. The transfer provides Sally's estate with a marital deduction of $6,000,000.

Question

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The marital deduction allows the transfer of property to a surviving spouse without incurring estate tax. The deduction is calculated as the value of the property minus any liabilities, such as a mortgage. Here, the real estate is worth $8,000,000, and the mortgage is $2,000,000, resulting in a net value of $6,000,000, which is the amount of the marital deduction.

Sally's Will Passes Real Estate to Otto (Her Surviving Husband)