Question

The advantages or disadvantages of the​ Hansens' plan to rely on the unlimited marital deduction​ are: ​(Select the best answer​ below.) A. the advantage is that regardless of the size of the estate it can be transferred​ tax-free and the disadvantage is that the surviving spouse can never travel outside of the U.S. or the spouse will be taxed. B. the advantage is that federal estate taxes can be avoided when the first spouse dies and the disadvantage is that the surviving​ spouse's estate is larger than the ​$5.34 million limit so estate taxes would have to be paid upon the surviving​ spouse's death and the unlimited marital deduction does not apply to spouses who are not U.S. citizens. C. the advantage is that regardless of the size of the estate it can be transferred​ tax-free and the disadvantage is that the IRS will find another way to tax the surviving spouse. D. the advantage is that federal estate taxes can be avoided completely and the disadvantage is that it does not apply to spouses who are U.S. citizens.

Answer 1

C. the advantage is that regardless of the size of the estate it can be transferred​ tax-free and the disadvantage is that the IRS will find another way to tax the surviving spouse.

Step-by-step explanation:

Indeed, the unlimited marital deduction provision allows a spouse (either the husband or the wife) to transfer an unrestricted amount of assets (estate assets) to the other spouse at any time regardless of the size of the estate without any​ tax deduction.

However, even though the IRS is unable to deduct this, it will find another way to tax the surviving spouse because that's their job.