Denise died April 1 and owned several bonds that paid interest March 31 and September 30. Also, she owned stock that paid dividends quarterly on March 31, June 30, September 30, and December 31. Denise's estate received the interest and dividends on the payment dates. What should be included in Denise's gross estate?

Question

Quizplus · Accepted Answer

Only interest and dividends received prior to the date of death should be included in Denise's gross estate. This is because, as per the general rule, income earned after the date of death does not form part of the decedent's taxable estate. However, the income earned before the date of death is considered to be part of the decedent's gross estate and is subject to estate tax. Therefore, the interest and dividends paid on March 31 should be included in Denise's gross estate, but the interest and dividends paid on September 30 should not be included.

Denise Died April 1 and Owned Several Bonds That Paid