9. Computing the federal transfer tax - Practice 2 Aa Aa E Ian Dreisbach died in 2012, leaving an estate of $21,000,000. Ian's wife died in 2009. In 2009, Ian gave his son property that resulted in a taxable gift of $4,000,000 and upon which Ian paid $950,000 in transfer taxes. Ian had made no other taxable gifts during his life. Ian's will provided a charitable bequest of $500,000 to his town's historical society. Use the following worksheet and Exhibits 15.7 and 15.8 to determine the federal transfer tax on Ian Dreisbach's estate. Enter a value of $0 for any line that does not apply. Computing Federal Estate Tax Due Date: 11/30/2012 Name: Ian Dreisbach Line Computation Item Amount Total Amount Subtract sum of: Gross estate (a) Funeral expenses (b) Administrative expenses (c) Debts (d) Other expenses Total: Result: Subtract sum of: Adjusted gross estate (a) Marital deduction (b) Charitable deduction Total: Result: Add: Result: Compute: Subtract sum of: Taxable estate Adjusted taxable gifts (post-1976) Estate tax base Tentative tax on estate tax basea (a) Gift tax payable on post-1976 gifts (b) Unified tax creditb Total: 11 Result: Subtract: Result: Total estate taxes Other credits Federal estate tax due 12 aUse Exhibit 15.7 to calculate the tentative tax. Use Exhibit 15.8 to determine the appropriate unified tax credit. Exhibit 15.8 Unified Credits and Applicable Exclusion Amounts for Estates and Gifts X Unified Tax Credit-Estates Applicable Exclusion Amount-Estates Unified Tax Credit-Gifts Applicable Exclusion Amount-Gifts Year 2006 2007 $2,000,000 $2,000,000 $2,000,000 $3,500,000 2008 2009 $780,800 $780,800 $780,800 $1,455,800 Estate tax repealed for 2010 $1,730,800 $1,772,800 $2,045,800 $345,800 $345,800 $345,800 $345,800 $330,800 $1,730,800 $1,772,800 $2,045,800 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $5,000,000 $5,120,000 $5,250,000 2010 2011 2012 2013 $5,000,000 $5,120,000 $5,250,000 Exhibit 15.7 - Federal Unified Transfer Tax Rates Tentative Tax Taxable Estate Value More Than But Not More Than Base Amount + Percent On Excess Over $0 10,000 20,000 $0 1,800 3,800 8,200 13,000 10,000 20,000 40,000 60,000 80,000 100,000 150,000 250,000 500,000 20% 22% 24% 26% 40,000 18,200 28% 60,000 80,000 100,000 150,000 250,000 500,000 $10,000 20,000 40,000 60,000 80,000 100,000 150,000 250,000 500,000 23,800 38,800 30% 32% 34% 37% 70,800 155,800