Question

Mr. Wright died with the following assets and liabilities: $200,000 in securities left to his wife, a $650,000 home left to his wife (the home cost $150,000), a $250,000 life insurance policy with his daughter as beneficiary, and $75,000 in debts and estate expenses. What is Mr. Wright's gross estate?

1) $1,100,000.00
2) $250,000.00
3) $1,025,000.00
4) $600,000.00

Answer 1

Mr. Wright's gross estate is $1,025,000.

Step-by-step explanation:

The gross estate of Mr. Wright can be calculated by adding up all the assets and deducting the liabilities. In this case, the assets include $200,000 in securities, $650,000 home (which cost $150,000), and a $250,000 life insurance policy. The liabilities are $75,000 in debts and estate expenses.

Therefore, the gross estate is calculated as follows:

• Securities: $200,000
• Home: $650,000
• Life insurance policy: $250,000
• Debts and estate expenses: -$75,000 (minus sign indicates liability)

Summing up these values, we get $1,025,000 as Mr. Wright's gross estate.