Question

Rachel died on 01/05/2020 and her executor is finalizing her estate tax return. She was unmarried at the time of death. The executor has determined that Rachel's adjusted gross estate is $16,000,000 and that her estate is entitled to a charitable deduction in the amount of $1,500,000. Rachel did not make any adjusted taxable gifts during her lifetime. Calculate the net estate tax liability for Rachel's estate.

A. $0

B. $1,168,000

C. $3,745,800

D. $5,800,000

Answer 1

The correct option is B

Please find below table useful to compute desired results: -

A 1 Gross Estate 2 Charitable Deduction 3 Net Estate 4 Taxable Estate 5 Estate Tax Exemption 6 Estate Tax rate 7 Net Estate Tax Liability 8 Correct Option 16000000 1500000 =B1-B2 =B3-B5 11580000 =40/100 =B4*B6

End results would be as follows: -

B А 1 Gross Estate 2 Charitable Deduction 3 Net Estate 4 Taxable Estate 5 Estate Tax Exemption 6 Estate Tax rate 7 Net Estate Tax Liability 8 Correct Option 16,000,000 1,500,000 14.500.000 2.920,000 11,580,000 40% 1,168,000