Final answer:
The gross estate of the decedent includes individually owned assets, half of the jointly owned property with a spouse, and the life insurance policy's value when owned by the decedent. After summing these, the total gross estate amounts to $575,000, which makes option (c) the correct answer.
Step-by-step explanation:
The question asks about the size of a decedent's gross estate. The gross estate typically includes the total value of all assets owned by an individual at the time of their death. In this case, the decedent owns $400,000 solely in her name, the full value of which is included in the gross estate. While the home is jointly owned with her spouse and has a $150,000 value, half of that value, or $75,000, would typically be included in the decedent's gross estate, assuming tenants by the entirety or joint tenancy with right of survivorship.
As for the $100,000 life insurance policy naming the children as beneficiaries, it is typically included in the decedent's gross estate, particularly when the decedent is the owner of the policy. Therefore, to calculate the gross estate, we sum up these numbers: $400,000 (individual assets) + $75,000 (one-half of the jointly owned home's value) + $100,000 (life insurance policy) to reach a total of $575,000. The correct answer is therefore (c) $575,000. This represents the total value of the decedent's assets for estate tax purposes.