In the current year, Martha makes the transfers below to her husband, Ryan. What is the amount, if any, of her marital deduction?
a) In August, she gives him a house valued at $250,000.
b) In December, she gives him a 15-year income interest in a trust with the bank name as trustee. She names her son as the remainderman. The trust is irrevocable and is funded with $500,000 of assets, and 8% is the applicable interest rate.
a) The marital deduction is $235,000 ($250,000 - $15,000 exclusion).
b) No marital deduction is available because the transfer is of a nondeductible terminable interest. The property passes to the daughter at the end of 15 years.
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