Which term describes the value remaining after deductions from the gross estate?

Which term describes the value remaining after deductions from the gross estate?

• A. Gross estate
• B. Net estate
• C. Deductions
• D. Lifetime exemption

Answer: (B)

After subtracting debts, funeral and administrative expenses, and other allowable deductions from the total value of all assets at death, the amount left is the net estate. The gross estate is everything owned at death before deductions, so it represents the starting value. The lifetime exemption reduces the taxable amount, not the actual value remaining after deductions. Deductions are the amounts subtracted, not the residual itself. Hence, the value remaining after those deductions is called the net estate.

After subtracting debts, funeral and administrative expenses, and other allowable deductions from the total value of all assets at death, the amount left is the net estate. The gross estate is everything owned at death before deductions, so it represents the starting value. The lifetime exemption reduces the taxable amount, not the actual value remaining after deductions. Deductions are the amounts subtracted, not the residual itself. Hence, the value remaining after those deductions is called the net estate.