her liabilities Tom Hruise was an entertainment executive who had a fatal accident on a film set. Tom's will directed his executor to distribute his cash and stock to his wife, Kaffie, and the real estate to his church, The First Church of Methodology. The remainder of his assets were to be placed in trust for his three children. Tom's estate consisted of the following: Assets Personal assets $ 1,550,000 Cash and stock 24,500,000 Intangible assets (film rights) 74,000,000 Real estate 15,500,000 $ 115,550,000 Liabilities: Mortgage $ 3,700,000 4,600,00 $ 8,300,000 a. Tom made a taxable gift of $5.60 million in 2011. Compute the estate tax for Tom's estate. (Refer to Exhibit 25-1 and Exhibit 25-2.) (Enter your answers in dollars, not millions of dollars.) By p a on the a M Gross estate Debts Adjustable gross estate Marital deduction Charitable deduction Taxable estate Adjusted taxable gifts Cumulative taxable transfers Current tax rates Tax on cumulative transfers Gift taxes payable on adjusted taxable gifts at current rate Tentative estate tax Applicable credit Gross estate tax Mc rc EXHIBIT 25-1 Unified Transfer Tax Rates of Amount Over Me rc Tax Base Equal to or Over Not Over Tentative Tax Plus $ 0 $10,000 $ 0 18% 10,000 20,000 1,800 20 20,000 40,000 3,800 22 40.000 60.000 8.200 24 60,000 80,000 13,000 26 80.000 100.000 18.200 28 100,000 150,000 23,800 30 150,000 250,000 38,800 32 250,000 500,000 70,800 34 500,000 750,000 155,800 37 750,000 1,000,000 248,300 39 1,000,000 345,800 40 *The applicable credit and exemption is zero for estates that opted out of the estate tax in 2010. $ 0 10,000 20,000 40,000 60,000 80,000 100,000 150.000 250,000 500,000 750,000 1,000,00 Screenshot Vie EXHIBIT 25-2 The Exemption Equivalent Year of Transfer Gift Tax Estate Tax 1986 $500,000 $500,000 1987-1997 600,000 600,000 1998 625,000 625,000 1999 650,000 675,000 1,000,000 650,000 675,000 2000-2001 2002-2003 1,000,000 2004-2005 1,000,000 1,500,000 20062008 2,000,000 20092010* 1,000,000 1,000,000 5,000,000 5,120,000 3,500,000 5,000,000 2011 2012 5,120,000 2013 5,250,000 5,250,000 2014 5,340,000 5,340,000 2015 5,430,000 5,430,000 2016 5,450,000 5,490,000 5,450,000 5,490,000 2017 2018 11,180,000 11,180,000 2019 11,400,000 11,400,000 *The applicable credit and exemption is zero for taxpayers who opt out of the estate tax in 2010