Question

9. Computing the federal transfer tax- Practice 2 Aa Aa Victor Fitzgerald died in 2012, leaving an estate of $24,000,000. Victor's wife died in 2009. In 2009, Victor gave his son property that resulted in a taxable gift of $5,000,000 and upon which Victor paid $1,100,000 in transfer taxes Victor had made no other taxable gifts during his life. Victor's will provided a charitable bequest of $750,000 to a museum of natural history Use the following worksheet and Exhibits 15.7 and 15.8 to determine the federal transfer tax on Victor Fitzgerald's estate. Enter a value of $0 for any line that does not apply. Computing Federal Estate Tax Due Name: Victor Fitzgerald Line Computation Date: 11/30/2012 Item Amount Total Amount Gross estate 2 Subtract sum of:(a) Funeral expenses (b) Administrative expenses (c) Debts (d) Other expenses Total: Result: Adjusted gross estate (a) Marital deduction (b) Charitable deduction Subtract sum of: Total: Result: Add Result: Compute: Subtract sum of: Taxable estate Adjusted taxable gifts (post-1976) Estate tax base Tentative tax on estate tax base (a) Gift tax payable on post-1976 gifts (b) Unified tax creditb 5 Total:

Answer 1

Computing Federal estate tax due
Gross Estate		$24,000,000
a) Funeral expenses	$0
b) Administrative expenses	$0
c) Debts	$0
d) Other expenses	$0
Total		$0
Adjusted gross estate		$24,000,000
a) Marital deduction	$0
b) Charitable deduction	$750,000
Total		($750,000)
Taxable estate		$23,250,000
Adjusted taxable gift		$5,000,000
Estate tax base		$28,250,000
Tentative tax on estate tax base
base amount	$155,800
37% tax on excess over $500,000	$10,267,500
Total		$10,423,300
a) Gift tax paid	$1,100,000
b) Unified tax credit	$1,772,800
Total		($2,872,800)
Total estate tax		$7,550,500
Other credits		$0
Federal estate tax due		$7,550,500