Required information The following information applies to the questions displaye

Question

Required information The following information applies to the questions displayed below. n 2010 Casey made a taxable gift of $7.0 million to both Stephanie and Linda (a total of $14.000 million in taxable gifts). Calculate the amount of gift tax due this year and Casey's unused exemption equivalent under the following alternatives. Refer to Exhibit 25-1 and Exhibit 25-2.) a. This year Casey made a taxable gift of $1.00 million to Stephanie. Casey is not married, and the 2010 gift was the only other taxable gift he has ever made. (Leave no answer blank. Enter zero if applicable. Enter your answers in dollars, not millions of dollars.) Gift tax due Unused exemption equivalent

Explanation / Answer

2010 Taxable gifts $ 7,000,000.00 annual exclusions($13,000 per donee) $        26,000.00 Current Taxable gifts $ 6,974,000.00 Prior Taxable gifts $                       -   cumulative gifts $ 6,974,000.00 Tax on cumulative gifts@35% $ 2,440,900.00 less:Current tax on prior taxable gifts $                       -   Tax on current taxable gifts $ 2,440,900.00 Unified credit in 2010(2010 limit) $      330,800.00 less:Unified credit used prevously $                       -   unused unified credit $      330,800.00 gift tax in 2010@35% on (2440900-330800) $      738,535.00 2011 Taxable gifts $ 1,000,000.00 annual exclusions($13,000 per donee) $        13,000.00 Current Taxable gifts $      987,000.00 Prior Taxable gifts $ 6,974,000.00 cumulative gifts $ 7,961,000.00 Tax on cumulative gifts@55% $ 4,378,550.00 less:Current tax on prior taxable gifts $ 2,440,900.00 Tax on current taxable gifts $ 1,937,650.00 Unified credit in 2011(2011 limit) $      330,800.00 less:Unified credit used prevously $      330,800.00 unused unified credit/unused exemption equivalent $                       -   gift tax in 2011@ 55% on 1937650 $ 1,065,707.50

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