Final answer:
Dividends on stock accrued prior to death but received after should be reported on Schedule B, Stocks and Bonds, of Form 706. They are part of the value of the stock at the date of death and should be included in the decedent's estate valuation. The correct answer is option A.Schedule B, Stocks and Bonds.
Step-by-step explanation:
The student has asked about how dividends on stock that were accrued prior to the date of death but received after the date of death should be reported on Form 706. Form 706 is the United States Estate (and Generation-Skipping Transfer) Tax Return, which is used to report the transfer of the decedent's estate to their heirs and beneficiaries.
The correct answer to the student's question is: Dividends that were accrued prior to the decedent's death but not received until after death should be reported on Schedule B, Stocks and Bonds. The reason for this is that these dividends are considered to be part of the value of the stock at the date of death. They are attributable to the period when the decedent was still the owner of the stocks and thus part of the decedent's estate.
It is important to correctly report such items on the appropriate schedule of Form 706 to ensure that the estate is properly taxed and that all assets are accurately accounted for. In this case, because the stock was solely owned by the decedent, any dividends that were accrued are inherently tied to the value of the stock and are considered part of the stock asset.