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Answer the following question based only on these two assumptions: First, Jack does not use a...

Answer the following question based only on these two assumptions: First, Jack does not use a marital deduction and second, Jack's taxable estate is $13,500,000. What is the estate tax liability after the applicable credit amount? NOTE: you do not need the case facts to answer this question. Please explain in detail.

A. $0

B. $768,000

C. $840,000

D. $5,400,000

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Answer #1

The correct answer is C

Explanation

As per IRS rule the deduction is $11.4 million in 2019 and after deducting remain Amount is taxable by flat @40%

Taxable estate……………............................ $13,500,000

Less: deduction (martial) ......................($11,400,000)

Taxable income ......................................$21,00,000

Tax amount = $21,00,000 * 40%

= $840,000

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