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$1,000,000 2008 $780,800 $2,000,000 $345,800 $1,000,000 2009 $1,455,800 $3,500,000 $345,800 $1,000,000 2010 Estate tax repealed for 2010 $330,800 $1,000,000 2011 $1,730,800 $5,000,000 $1,730,800 $5,000,000 2012 $1,772,800 $5,120,000 $1,772,800 $5,120,000 2013 $2,045,800 $5,250,000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