Explain why the estate was not subject to any federal

Charge and discharge statement. Maxwell Stevens, a single person, died on August 12, 20X8. His will indicated the following:

a. His nephew should receive any income from the estate until such time as the estate is liquidated.

b. All assets of the estate should be converted to cash in a timely manner, and the ?nal remain- ing estate principal should be conveyed to Ducks Unlimited, a not-for-pro?t organization, with the stipulation that these funds be used for wetland preservation efforts in the state of Colorado.

c. Maxwell's attorney, Janice Edquist, is to serve as executrix of the estate. The following events occurred regarding the estate of Maxwell Stevens:

a. Various bank accounts totaling $34,000 were consolidated for estate purposes.

b. An insurance policy with a death bene?t of $300,000 was discovered subsequent to death. The policy names Maxwell Stevens's niece, Cynthia Townsend, bene?ciary of the policy.

c. Stocks with a fair value of $278,000 at date of death were sold for $267,000. Dividends on the above stocks were received in the amount of $3,400, of which $1,200 represented amounts that had been declared to shareholders of record on August 1, 20X8.

d. Bonds with a fair value of $138,000 at date of death were sold for $143,000, including accrued interest. The accrued interest subsequent to the date of death was $850.

e. Real estate with a fair value of $380,000 at date of death was sold for $390,000 less broker's commission of 8% and closing fees of $750. Prior to the closing on the sale of real estate, rental income in the amount of $14,500 was received and expenses (not including interest) totaling $6,550 were paid. Rental income and expenses in the amounts of $6,250 and $3,600, respectively, were traceable to the period prior to the decedent's death.

f. A land contract note on the real estate in the amount of $97,000 was paid off upon sale of the real estate. In addition to the principal amount, accrued interest in the amount of $2,550 was also paid. Of the interest, $1,230 had accrued prior to the decedent's death.

g. The following claims against the estate existed: funeral and administrative expenses, $11,200; decedent's ?nal personal income tax liability, $3,200; and miscellaneous personal bills, $1,300.

1. Explain why the estate was not subject to any federal estate tax.

2. Assuming that the above information describes the activities of the estate and that all provisions of the decedent's will have been carried out, prepare a charge and discharge statement.

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Financial Accounting: Explain why the estate was not subject to any federal
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