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9. Computing the federal transfer tax - Practice 2 Sean Caddell died in 2012, leaving an estate of $27,000,000. Sean's wife died in 2009. In 2009, Sean gave his son property that resulted in a taxable gift of $6,000,000 and upon which Sean paid $1,300,000 in transfer taxes. Sean had made no other taxable gifts during his life. Sean's will provided a charitable bequest of $900,000 to his church. Exhibits - Tax schedules and credits Exhibit 15.7 - Unified Credits and Applicable Exclusion Amounts for Estates and Gifts: Exhibit 158-Federal Unified Transfer Tax Rates Unified Tax Credit- Estates Year Applicable Exclusion Amount- Estates $2,000,000 $3,500,000 Applicable Exclusion Amount -Gifts 2008 Unified Tax Credit Gifts $345,800 $345,800 $330,800 2009 $1,000,000 $1,000,000 $1,000,000 2010 $780,000 $1,455,800 Estate tax repeated for 2010 $1,730,800 $1,772,800 $2,045,800 $2,081,800 2011 2012 2013 2014 2015 $5,000,000 $5,120,000 $5,250,000 $5,340,000 $5,430,000 $5,340,000 $5,490,000 $11,180,000 $1,730,800 $1,772,800 $2,045,800 $2,081,800 $2,117,800 $2,125,800 $2,141,800 $4,417,800 $2,117,800 $2,125,800 $2,141,800 $4,417,800 $5,000,000 $5,120,000 $5,250,000 $5,340,000 $5,430,000 $5,340,000 $5,490,000 $11,180,000 2016 2017 2018 Source: Internal Revenue Service Use the following worksheet to calculate the federal estate tax due on Sean Caddell's estate. (Hint: Enter a value of $0 for any line that does not apply. Use Exhibit 15.7 to determine the appropriate unified tax credit. Use Exhibit 15.8 to calculate the tentative tax.) Name: Sean Computation Line 1 Total Amount 2 Subtract sum of: (50.00) 3 Result: Subtract sum of: 4 Computing Federal Estate Tax Due Date: 11/30/2012 Item Amount Gross estate (a) Funeral expenses $0.00 (b) Administrative expenses $0.00 (c) Debts $0.00 (d) Other expenses $0.00 Total: Adjusted gross estate (a) Marital deduction $0.00 (b) Charitable deduction 5 Total: Taxable estate Adjusted taxable gifts (post-1976) Estate tax base Tentative tax on estate tax base (a) Gift tax payable on post-1975 gifts (b) Unified tax credit Total: Total estate taxes Other credits Federal estate tax due Us 5 Result: Add: 6 5 7 Result 8 Compute Subtract sum of: 9 (5 10 11 Result Subtract Result: ($0.00) 12 9. Computing the federal transfer tax - Practice 2 Sean Caddell died in 2012, leaving an estate of $27,000,000. Sean's wife died in 2009. In 2009, Sean gave his son property that resulted in a taxable gift of $6,000,000 and upon which Sean paid $1,300,000 in transfer taxes. Sean had made no other taxable gifts during his life. Sean's will provided a charitable bequest of $900,000 to his church. Exhibits - Tax schedules and credits Exhibit 15.7 - Unified Credits and Applicable Exclusion Amounts for Estates and Gifts: Exhibit 158-Federal Unified Transfer Tax Rates Unified Tax Credit- Estates Year Applicable Exclusion Amount- Estates $2,000,000 $3,500,000 Applicable Exclusion Amount -Gifts 2008 Unified Tax Credit Gifts $345,800 $345,800 $330,800 2009 $1,000,000 $1,000,000 $1,000,000 2010 $780,000 $1,455,800 Estate tax repeated for 2010 $1,730,800 $1,772,800 $2,045,800 $2,081,800 2011 2012 2013 2014 2015 $5,000,000 $5,120,000 $5,250,000 $5,340,000 $5,430,000 $5,340,000 $5,490,000 $11,180,000 $1,730,800 $1,772,800 $2,045,800 $2,081,800 $2,117,800 $2,125,800 $2,141,800 $4,417,800 $2,117,800 $2,125,800 $2,141,800 $4,417,800 $5,000,000 $5,120,000 $5,250,000 $5,340,000 $5,430,000 $5,340,000 $5,490,000 $11,180,000 2016 2017 2018 Source: Internal Revenue Service Use the following worksheet to calculate the federal estate tax due on Sean Caddell's estate. (Hint: Enter a value of $0 for any line that does not apply. Use Exhibit 15.7 to determine the appropriate unified tax credit. Use Exhibit 15.8 to calculate the tentative tax.) Name: Sean Computation Line 1 Total Amount 2 Subtract sum of: (50.00) 3 Result: Subtract sum of: 4 Computing Federal Estate Tax Due Date: 11/30/2012 Item Amount Gross estate (a) Funeral expenses $0.00 (b) Administrative expenses $0.00 (c) Debts $0.00 (d) Other expenses $0.00 Total: Adjusted gross estate (a) Marital deduction $0.00 (b) Charitable deduction 5 Total: Taxable estate Adjusted taxable gifts (post-1976) Estate tax base Tentative tax on estate tax base (a) Gift tax payable on post-1975 gifts (b) Unified tax credit Total: Total estate taxes Other credits Federal estate tax due Us 5 Result: Add: 6 5 7 Result 8 Compute Subtract sum of: 9 (5 10 11 Result Subtract Result: ($0.00) 12
