Chapter 15

Financial Planning

.Exercise 7 Calculation of estate taxes

Use Worksheet 15.1. When Jackson Holmes died in 2018, he left an estate valued at $8,050,000. His trust directed distribution as follows: $18,000 to the local hospital, $160,000 to his alma mater, and the remainder to his three adult children. Death-related costs were $16,500 for funeral expenses, $45,000 paid to attorneys, $4,500 paid to accountants, and $40,000 paid to the trustee of his living trust. In addition, there were debts of $110,000. Use Worksheet 15.1 and Exhibit 15.5 and Exhibit 15.6 to calculate the federal estate tax due on Jackson's estate. Round your answer to nearest whole dollar. _________________________