Bob's adjusted gross estate is $5 million.Bob's estate will incur death taxes and funeral and administration expenses of $1 million.Bob's gross estate includes stock in Bluejay Corporation (date of death fair market value of $1,800,000,basis to Bob of $900,000).Bob owned 40% of the stock in Bluejay Corporation.Bluejay (E & P of $2 million)redeems all of the estate's stock for $1,800,000.Bob named his daughter,Bonnie,who has no interest in Bluejay,as his sole heir.Discuss the tax consequences of the redemption.

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The Answer of Bob's adjusted gross estate is $5 million.Bob's estate will incur death taxes and funeral and administration expenses of $1 million.Bob's gross estate includes stock in Bluejay Corporation (date of death fair market value of $1,800,000,basis to Bob of $900,000).Bob owned 40% of the stock in Bluejay Corporation.Bluejay (E & P of $2 million)redeems all of the estate's stock for $1,800,000.Bob named his daughter,Bonnie,who has no interest in Bluejay,as his sole heir.Discuss the tax consequences of the redemption.

Bob's Adjusted Gross Estate Is $5 Million