What is true regarding the treatment of real estate in a gross estate?

The treatment of real estate in a gross estate is accurately described by the assertion that it includes worldwide real estate in the decedent's estate. This is a fundamental principle in estate planning and tax law. When calculating the gross estate for estate tax purposes, all real property owned by the decedent at the time of death is included, regardless of its location. This means that if a person owned real estate in multiple countries, all of that property would be part of the gross estate, making it subject to the estate tax rules of the jurisdiction in question.

Inclusion of worldwide real estate reflects the principle that an individual's estate consists of all assets they possess, irrespective of geographical limitations. This principle ensures a comprehensive assessment of the decedent's wealth, facilitating accurate estate tax evaluations and potential liabilities that may arise upon death.

Understanding this concept is critical for estate planning professionals, as they must take into account all real property owned by a client, not just property located within the client's state of residence. Consequently, when advising clients on estate planning, it's essential to recognize the global nature of real estate ownership and its implications for estate taxation.