Hank is a single individual who possesses a life insurance policy worth $300,000 that will pay his two children a total of $800,000 upon his death. This year Hank transferred the policy and all incidents of ownership to an irrevocable trust that pays income annually to his two children for 15 years and then distributes the corpus to the children in equal shares. Assume that Hank has made only one prior taxable gift of $5 million in 2011.(Refer toExhibit 21andExhibit25-2.)(Leave no answer blank. Enter zero if applicable.)

a.Calculate the amount of gift tax due (if any) on the gift.

b.Calculate the amount of cumulative taxable transfers for estate tax purposes if Hank dies this year but after the date of the gift. At the time of his death, Hanks probate estate is $10 million and it is to be divided in equal shares between his two children

IEXHJBIT 25 1 Unied Transfer Tax Rate? _________________________________________________________________________________________________________________________________________________ T03. Base equal to 01' nver Nut ever Tentative tau: plus of amuunt ever 95 0 10,000 1: 0 ______________________ 10,303 ____________ 5 3,5311 ________________________ , 10000 20,000 20,000 1 .............................................................................................................................................. g 40,000 40,000 1 .............................................................................................................................................. g 50,000 00,000 13,000 50,000 ______________________ 5 0,000 ___________ 1 05,003 ___________________ 1 5,500 ____________________________________ 5 0000 ____________________ 1 33,363 __________ 1 53,536 ___________________ 5 5,536 __________________________________ 1 00000 a ............................................................................................................................................. 1 150,000 150,000 1 .............................................................................................................................................. g i 250,000 500,000 50,500 250,000 ____________________ 500000 550000155500 500000 550000 \"1,050,511; 245qu __________________________________ 5 50000 ______________________________________________________________________________________________________________________________________________ .i LUDUU 345,3 1,,U,