Bonnie died on June 1, 2022, survived by her husband, Abner, and two sons, Carl and Doug.

Question:

Bonnie died on June 1, 2022, survived by her husband, Abner, and two sons, Carl and Doug. Bonnie’s only lifetime taxable gift was made in October 2020 in the taxable amount of $13.25 million. She did not elect gift splitting. By the time of her death, the value of the gifted property (stock) had declined to $5.1 million. Bonnie’s executor discovered the items shown below. Amounts shown are the FMVs of the items as of June 1, 2022.

Bonnie’s debts, as of her date of death, were $60,000. Her funeral and administration expenses were $9,000 and $71,000, respectively. Her estate paid state death taxes of $65,000. The executor elected to deduct the administration expenses on the estate tax return.

Bonnie’s will included the following:

I leave my residence to my husband Abner.
$250,000 of property is to be transferred to a trust with First Bank named as trustee. All of the income is to be paid to my husband, Abner, semiannually for the rest of his life. Upon his death the property is to be divided equally between my two sons or their estates.

I leave $47,000 to the American Cancer Society.
Assume the executor elected to claim the maximum marital deduction possible. Compute the following with respect to Bonnie’s estate:
a. Gross estate
b. Taxable estate
c. Adjusted taxable gifts
d. Estate tax base and basic exclusion amount portable to Abner
e. Tentative tax on estate tax base
f. Federal estate tax payable