9. Computing the federal transfer tax - Practice 2 Vincent Garfield died in 2012, leaving an estate of $27,000,000. Vincent's wife died in 2009. In 2009, Vincent gave his son property that resulted in a taxable gift of $6,000,000 and upon which Vincent paid $1,300,000 in transfer taxes. Vincent had made no other taxable gifts during his life. Vincent's will provided a charitable bequest of $900,000 to his church. 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 Tentative Tax More Than But Not More Than Base Amount + Percent On Excess Over $0 10,000 $0 10,000 20,000 1,800 20% $10,000 20,000 40,000 3,800 22% 20,000 40,000 60,000 8,200 24% 40,000 60,000 80,000 13,000 26% 60,000 80,000 100,000 18,200 28% 80,000 100,000 150,000 23,800 30% 100,000 150,000 250,000 38,800 32% 150,000 250,000 500,000 70,800 34% 250,000 500,000 155,800 37% 500,000 Exhibit 15.7 - Federal Unified Transfer Tax Rates: Unified TaxCredit- Estates Year 2006 $780,800 2007 $780,800 2008 $780,800 2009 $1,455,800 2010 Estate tax repealed for 2010 2011 $1,730,800 2012 $1,772,800 2013 $2,045,800 Exhibits Tax schedules and credits Exhibit 15.8- Unified Credits and Applicable Exclusion Amounts for Estates and Gifts: Applicable ExclusionAmount- Estates $2,000,000 $2,000,000 $2,000,000 $3,500,000 $5,000,000 $5,120,000 $5,250,000 Unified TaxCredit- Applicable ExclusionAmount Gifts -Gifts $345,800 $1,000,000 $345,800 $1,000,000 $345,800 $1,000,000 $345,800 $1,000,000 $330,800 $1,000,000 $1,730,800 $5,000,000 $1,772,800 $5,120,000 $2,045,800 $5,250,000 Use the following worksheet and Exhibits 15.7 and 15.8 to determine the federal transfer tax on Vincent Garfield's estate. (Hint: Enter a value of $0 for any line that does not apply.) Computing Federal Estate Tax Due Name: Vincent Date: 11/30/2011 Line Computation Item Amount Total Amount 1 Gross estate 2 Subtract sum of: (a) Funeral expenses (b) Administrative expenses (c) Debts (d) Other expenses Total: 3 Result: Adjusted gross estate 4 Subtract sum of: (a) Marital deduction (b) Charitable deduction Total: 5 Result: Taxable estate 6 Add: Adjusted taxable gifts (post-1976) 7 Result: Estate tax base 8 Compute: Tentative tax on estate tax base" 9 Subtract sum of: (a) Gift tax payable on post-1976 gifts (b) Unified tax credit Total: 10 Result: Total estate taxes 11 Subtract: Other credits $ $ $ $ $ $ $ $ $ ($ $ ($ $ $ $ $ ($ $ ($ ) ) ) ) 10 11 12 Result: Subtract: Result: Total estate taxes Other credits Federal estate tax due $ ($ $ ) 9. Computing the federal transfer tax - Practice 2 Vincent Garfield died in 2012, leaving an estate of $27,000,000. Vincent's wife died in 2009. In 2009, Vincent gave his son property that resulted in a taxable gift of $6,000,000 and upon which Vincent paid $1,300,000 in transfer taxes. Vincent had made no other taxable gifts during his life. Vincent's will provided a charitable bequest of $900,000 to his church. 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 Tentative Tax More Than But Not More Than Base Amount + Percent On Excess Over $0 10,000 $0 10,000 20,000 1,800 20% $10,000 20,000 40,000 3,800 22% 20,000 40,000 60,000 8,200 24% 40,000 60,000 80,000 13,000 26% 60,000 80,000 100,000 18,200 28% 80,000 100,000 150,000 23,800 30% 100,000 150,000 250,000 38,800 32% 150,000 250,000 500,000 70,800 34% 250,000 500,000 155,800 37% 500,000 Exhibit 15.7 - Federal Unified Transfer Tax Rates: Unified TaxCredit- Estates Year 2006 $780,800 2007 $780,800 2008 $780,800 2009 $1,455,800 2010 Estate tax repealed for 2010 2011 $1,730,800 2012 $1,772,800 2013 $2,045,800 Exhibits Tax schedules and credits Exhibit 15.8- Unified Credits and Applicable Exclusion Amounts for Estates and Gifts: Applicable ExclusionAmount- Estates $2,000,000 $2,000,000 $2,000,000 $3,500,000 $5,000,000 $5,120,000 $5,250,000 Unified TaxCredit- Applicable ExclusionAmount Gifts -Gifts $345,800 $1,000,000 $345,800 $1,000,000 $345,800 $1,000,000 $345,800 $1,000,000 $330,800 $1,000,000 $1,730,800 $5,000,000 $1,772,800 $5,120,000 $2,045,800 $5,250,000 Use the following worksheet and Exhibits 15.7 and 15.8 to determine the federal transfer tax on Vincent Garfield's estate. (Hint: Enter a value of $0 for any line that does not apply.) Computing Federal Estate Tax Due Name: Vincent Date: 11/30/2011 Line Computation Item Amount Total Amount 1 Gross estate 2 Subtract sum of: (a) Funeral expenses (b) Administrative expenses (c) Debts (d) Other expenses Total: 3 Result: Adjusted gross estate 4 Subtract sum of: (a) Marital deduction (b) Charitable deduction Total: 5 Result: Taxable estate 6 Add: Adjusted taxable gifts (post-1976) 7 Result: Estate tax base 8 Compute: Tentative tax on estate tax base" 9 Subtract sum of: (a) Gift tax payable on post-1976 gifts (b) Unified tax credit Total: 10 Result: Total estate taxes 11 Subtract: Other credits $ $ $ $ $ $ $ $ $ ($ $ ($ $ $ $ $ ($ $ ($ ) ) ) ) 10 11 12 Result: Subtract: Result: Total estate taxes Other credits Federal estate tax due $ ($ $ )