9. Computing the federal transfer tax - Practice 2 Christian Riddick died in 2012, leaving an estate of $27,000,000. Christian's wife died in 2009. In 2009, Christian gave his son property that resulted in a taxable gift of $6,000,000 and upon which Christian paid $1,300,000 in transfer taxes. Christian had made no other taxable gifts during his life. Christian's will provided a charitable bequest of $900,000 to his town's historical society. Exhibits - Tax schedules and credits Exhibit 15.7 - Federal Unified Transfer Tax Rates: Exhibit 15.8 -- Unified Credits and Applicable Exclusion Amounts for Estates and Gifts: Taxable Estate Value More Than Tentative Tax + Percent But Not More Than Base Amount On Excess Over 50 so 10,000 20,000 10,000 20% 22% 40,000 60,000 80,000 24% 1,800 3,800 8,200 13,000 18,200 23,800 38,800 $10,000 20,000 40,000 60,000 80,000 26% 20,000 40,000 60,000 80,000 100,000 150,000 250,000 500,000 28% 30% 100,000 150,000 250,000 500,000 32% 100,000 150,000 250,000 70,800 34% 155,800 37% 500,000 Exhibits - Tax schedules and credits Exhibit 15.8 -- Unified Credits and Applicable Exclusion Amounts for Estates and Gifts: Exhibit 15.7 - Federal Unified Transfer Tax Rates: Unified Tax Credit- Estates $780,800 Applicable ExclusionAmount- Estates Year Unified Tax Credit- Gifts $345,800 Applicable ExclusionAmount -Gifts $1,000,000 2006 $2,000,000 $2,000,000 $2,000,000 2007 2005 2009 2010 $780,800 $780,800 $1,455,800 Estate tax repealed for 2010 $345,800 $345,800 $345,800 $330,800 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $3,500,000 2011 $1,730,800 $1,730,800 $1,772,800 $5,000,000 $5,120,000 2012 .,772,800 $2,045,800 $5,000,000 $5,120,000 $5,250,000 2013 $2,045,800 $5,250,000 Use the following worksheet and Exhibits 15.7 and 15.8 to determine the federal transfer tax on Christian Riddick's estate. (Hint: Enter a value of so for any line that does not apply.) Name: Christian Computation Line Total Amount 1 2 Subtract sum of: 3 $ Result: Subtract sum of: 4 Computing Federal Estate Tax Due Date: 11/30/2011 Item Amount Gross estate (2) Funeral expenses S (b) Administrative expenses (c) Debts S (d) Other expenses S Total: Adjusted gross estate (a) Marital deduction (b) Charitable deduction S Total: Taxable estate Adjusted taxable gifts (post-1976) Estate tax base Tentative tax on estate tax base" (a) Gift tax payable on post-1976 gifts S (b) Unified tax credit S Total: Total estate taxes Other credits Result: $ $ Add: Result: ITULI $ 8 $ Compute: Subtract sum of: $ 10 Result: $ 11 Subtract: s 12 Result: Federal estate tax due $ Use Exhibit 15.7 to calculate the tentative tax. Use Exhibit 15.8 to determine the appropriate unified tax credit. 9. Computing the federal transfer tax - Practice 2 Christian Riddick died in 2012, leaving an estate of $27,000,000. Christian's wife died in 2009. In 2009, Christian gave his son property that resulted in a taxable gift of $6,000,000 and upon which Christian paid $1,300,000 in transfer taxes. Christian had made no other taxable gifts during his life. Christian's will provided a charitable bequest of $900,000 to his town's historical society. Exhibits - Tax schedules and credits Exhibit 15.7 - Federal Unified Transfer Tax Rates: Exhibit 15.8 -- Unified Credits and Applicable Exclusion Amounts for Estates and Gifts: Taxable Estate Value More Than Tentative Tax + Percent But Not More Than Base Amount On Excess Over 50 so 10,000 20,000 10,000 20% 22% 40,000 60,000 80,000 24% 1,800 3,800 8,200 13,000 18,200 23,800 38,800 $10,000 20,000 40,000 60,000 80,000 26% 20,000 40,000 60,000 80,000 100,000 150,000 250,000 500,000 28% 30% 100,000 150,000 250,000 500,000 32% 100,000 150,000 250,000 70,800 34% 155,800 37% 500,000 Exhibits - Tax schedules and credits Exhibit 15.8 -- Unified Credits and Applicable Exclusion Amounts for Estates and Gifts: Exhibit 15.7 - Federal Unified Transfer Tax Rates: Unified Tax Credit- Estates $780,800 Applicable ExclusionAmount- Estates Year Unified Tax Credit- Gifts $345,800 Applicable ExclusionAmount -Gifts $1,000,000 2006 $2,000,000 $2,000,000 $2,000,000 2007 2005 2009 2010 $780,800 $780,800 $1,455,800 Estate tax repealed for 2010 $345,800 $345,800 $345,800 $330,800 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $3,500,000 2011 $1,730,800 $1,730,800 $1,772,800 $5,000,000 $5,120,000 2012 .,772,800 $2,045,800 $5,000,000 $5,120,000 $5,250,000 2013 $2,045,800 $5,250,000 Use the following worksheet and Exhibits 15.7 and 15.8 to determine the federal transfer tax on Christian Riddick's estate. (Hint: Enter a value of so for any line that does not apply.) Name: Christian Computation Line Total Amount 1 2 Subtract sum of: 3 $ Result: Subtract sum of: 4 Computing Federal Estate Tax Due Date: 11/30/2011 Item Amount Gross estate (2) Funeral expenses S (b) Administrative expenses (c) Debts S (d) Other expenses S Total: Adjusted gross estate (a) Marital deduction (b) Charitable deduction S Total: Taxable estate Adjusted taxable gifts (post-1976) Estate tax base Tentative tax on estate tax base" (a) Gift tax payable on post-1976 gifts S (b) Unified tax credit S Total: Total estate taxes Other credits Result: $ $ Add: Result: ITULI $ 8 $ Compute: Subtract sum of: $ 10 Result: $ 11 Subtract: s 12 Result: Federal estate tax due $ Use Exhibit 15.7 to calculate the tentative tax. Use Exhibit 15.8 to determine the appropriate unified tax credit