Question

Your gross estate is reduced by the _____ to determine the adjusted gross estate.

A) State death tax credit
B) Orphan's deduction
C) Marital deduction
D) Funeral and administrative expenses
E) Previous year's income tax

Answer 1

The Marital deduction is used to reduce the gross estate and calculate the adjusted gross estate in estate tax calculations.

Step-by-step explanation:

The correct answer is C) Marital deduction.

When calculating the adjusted gross estate, the gross estate is reduced by the Marital deduction. The Marital deduction allows for the unlimited transfer of assets from one spouse to another without incurring estate tax. This deduction helps to reduce the overall value of the estate.

For example, let's say a person's gross estate is $10 million and they leave the entire estate to their spouse. By utilizing the Marital deduction, the adjusted gross estate would be reduced to $0, since there is no estate tax due on assets transferred to a surviving spouse.