Problem 14-49 (LO 14-2)

[The following information applies to the questions displayed below.] In 2010 Casey made a taxable gift of $5 million to both Stephanie and Linda (a total of $10 million in taxable gifts). Calculate the amount of gift tax due this year and Caseys unused exemption equivalent under the following alternatives. (Refer to Exhibit 25-1 and Exhibit 25-2.) (Enter your answers in dollars, not millions of dollars. Leave no answer blank. Enter zero if applicable.)

Problem 14-49 Part a

a. This year Casey made a taxable gift of $1 million to Stephanie. Casey is not married, and the 2010 gift was the only other taxable gift he has ever made.

EXHIBIT 25-2 The Exemption Equivalent

Year of Transfer	Gift Tax	Estate Tax
1986	$500,000	$500,000
19871997	600,000	600,000
1998	625,000	625,000
1999	650,000	650,000
20002001	675,000	675,000
20022003	1,000,000	1,000,000
20042005	1,000,000	1,500,000
20062008	1,000,000	2,000,000
20092010*	1,000,000	3,500,000
2011	5,000,000	5,000,000
2012	5,120,000	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	5,450,000
2017	5,490,000	5,490,000
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.