When Reuben Mosher died in 2015, he leftand estate valued at $5,850.00. His trus

Question

When Reuben Mosher died in 2015, he leftand estate valued at $5,850.00. His trust directed distribution as follows: $20,000 to the local hospital, $160,000 to his alma mater, and the remainder to his three children. Death-related cost were $6,800 for funeral expenses, $40,000 paid to attorneys, $5,000 paid to accountants, and $30,000 paid to the trustee of his living trust. In addition, there were debts of $125,000. Use Exhibits 25.5 and 15.6 to calculate the federal estate tax due on his estate.

Explanation / Answer

Computing Federal Estate Tax Due Gross estate $5,850,000 Subtract sum of: (a) Funeral expenses $6,800 (b) Administrative expenses($40,000+5,000+30000) $75,000 (c) Debts $125,000 (d) Other expenses $0 Total -$206,800 Result Adjusted gross estate $5,643,200 Subtract sum of: (a) Marital deduction $0 (b) Charitable deduction $180,000 Total -$180,000 Result Taxable estate $5,463,200 Add: Adjusted taxable gifts (post-1976) $0 Result Estate tax base $5,463,200 Compute Tentative tax on estate tax base (calculated below) $2,339,240 Subtract sum of: (a) Gift tax payable on post-1976 gifts $0 (b) Unified tax credit (Use Exhibit 15.8 to determine the appropriate unified credit for 2012 $1,772,800 Total -$1,772,800 Result Federal estate tax due $566,440 Use Exhibit 15.7 for the calculation of the tentative tax: 780,800 + [.45 x (5,463,200 – 2,000,000)] $2,339,240

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.