Darleen lives in Arizona and acquired all of her property interests while living there. She owns a primary residence worth $12.2 million. She owns a condo near a Colorado ski resort worth $800,000. Mortgages on the two homes equal $600,000. Darleen inherited money from her father which she deposited in a separate account. She used this money to acquire commercial property for an art gallery. The FMV of the commercial property is $1 million and has a mortgage of $400,000.

1. Assume that Darleen died today. What is the value of her adjusted gross estate?

a. $13.4 mill

b. $13.0 mill

c. $12.2 mill

d $12.0 mill

2. A credit for estate taxes due is available for Darleen that will ensure that most of her estate taxes due are eliminated.

a. True

b. False

3. Darleen must file an IRS Form 709.

a. True

b. False

4. If Darleen's sister is listed as the executor, she can waive any executor fees she is able to justly receive.

a. True

b. False

5. What is Darleen's net federal estate tax payable? Assume that funeral and administrative costs were $145,000. Use a 2021 unified credit of $4,680,000. Use a 40% estate tax rate.

a. $4,483,400

b. $724,200

c. $462,000

d. $5,142,000