4. Austin, whose wife died four years ago, has his entire net worth invested in the three assets listed below. Austin recently celebrated his 90th birthday. His cardiologist Dr. Baker predicts Austin has less than 6 months to live. Austin got carried away at an auction 6 days ago and paid more for a Picasso painting than it is worth. The next day Austin hired a very skilled valuation expert named Jackson to make reasonable estimates of the value of his assets on the dates indicated. Original Cost Basis Fair Market Value Today Fair Market Value On Expected Date of Death Personal Residence $600,000 $7,300,000 $8,000,000 Famous Picasso Painting 2,000,000 1,600,000 1,500,000 Cash in Checking Account generating no interest 6,000,000 6,000,000 6,000,000 Total 8,600,000 14,900,000 15,500,000 Austin and his two children, Kamila and Natasha come to you seeking your answers to the following questions. Assume Austin intends to leave his entire estate in equal shares to his two children, but isn't sure whether to make a gift now or simply allow the two of them to inherit everything when Austin dies. Assume Austin does die on the same date his cardiologist predicted (6 months from now when the Federal Estate Tax Exemption is $12,920,000). (a) (2 Points). If Austin makes no additional gifts prior to his death, how much federal estate tax will be owed following Austins death? (b) (2 Points). If Austin lives in Utah, how much Utah estate or inheritance tax will be owed following Austins death? (c) (5 Points). What basis will Natasha take in her 50% interest in each of these three assets if the 50% interest is gifted from Austin to her by 5:00 p.m. today? (d) (5 Points). What basis will Natasha take in her 50% interest in each of the three assets if she and her sister inherit equal portions of each asset following Austins death exactly 6 months from now? (e) (6 Points). Kamila hopes to become the owner of the assets today and plans to immediately sell or convert the assets to cash in order to finance the purchase of a 51% % interest in the company where she works. Assuming long term capital gains are taxed at a 20% rate, and short-term capital gains are taxed at a 37% rate, how much will she owe in federal income taxes as a result of the sale of her 50% interest in each asset? (f) (6 Points). Assuming Natsha inherits a 50% interest in each of the assets upon Austin's death and immediately sells them, what is the amount and character of the income to be reported from the sale of the 50% interest in each of the three assets?