Jones is seriously ill and has $3 million of property that he wants to leave to his four children. He is considering making a current gift of the property (rather than leaving the property to pass through his will). Assuming any taxable transfer will be subject to the highest transfer tax rate. (Refer to Exhibit 25-1 and Exhibit 25-2.) Required: a. Determine how much gift tax Jones will owe if he makes the transfers now b. If he makes a current gift, how much estate tax will Jones save if he dies after three years, during which time the property appreciates to $4.5 million? (For all requirements, enter your answers in dollars and not in millions of dollars.) a. Amount of gift tax b. Amount of estate tax savings EXHIBIT 25-2 The Exemption Equivalent Year of Transfer Estate Tax S 500,000 S 500,000 600,000 625,000 650,000 675,000 1.000,000 1,500,000 2.000,000 3,500,000 5.000,000 5,120,000 5,250,000 5,340,000 5.430.000 5,450,000 5.490.000 11,180,000 Gift Tax 1986 600,000 625.000 650,000 675.000 1.000,000 1.000,000 1.000,000 1,000,000 5,000,000 5,120,000 5,250,000 5,340,000 5.430,000 5,450,000 5.490.000 1987-1997 1998 1999 2000-2001 2002-2003 2004-2005 2006-200S 2009-2010 2011 2012 2013 2014 2015 2016 2017 2018 11,180,000 The applicable credit and exemption is zero for taxpayers who opt out of the estate tax in 2010