Problem 25-50 (LO 25-3) (Algo)

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[The following information applies to the questions displayed below.] Tom Hruise was an entertainment executive who had a fatal accident on a film set. Toms 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. Toms estate consisted of the following:

Assets:
Personal assets	$ 1,130,000
Cash and stock	25,300,000
Intangible assets (film rights)	78,000,000
Real estate	16,300,000
	$ 120,730,000
Liabilities:
Mortgage	$ 4,500,000
Other liabilities	5,400,000
	$ 9,900,000

Tom made a taxable gift of $6.40 million in 2011. Compute the estate tax for Toms estate. (Refer to Exhibit 25-1 and Exhibit 25-2.)

EXHIBIT 25-1 Unified Transfer Tax Rates*

Tax Base Equal to or Over	Not Over	Tentative Tax	Plus	of Amount Over
$ 0	$10,000	$ 0	18%	$ 0
10,000	20,000	1,800	20	10,000
20,000	40,000	3,800	22	20,000
40,000	60,000	8,200	24	40,000
60,000	80,000	13,000	26	60,000
80,000	100,000	18,200	28	80,000
100,000	150,000	23,800	30	100,000
150,000	250,000	38,800	32	150,000
250,000	500,000	70,800	34	250,000
500,000	750,000	155,800	37	500,000
750,000	1,000,000	248,300	39	750,000
1,000,000		345,800	40	1,000,000

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
2020	11,580,000	11,580,000
2021	11,700,000	11,700,000

*The applicable credit and exemption are zero for taxpayers who opt out of the estate tax in 2010.

Gross estate
Marital Deduction
Charitable Deduction
Debts
Taxable Estate
Adjusted taxable gifts
Cumulative taxable transfers
Tax on cumulative transfers
Current tax on adjusted taxable gifts
Tentative estate tax
Applicable credit
Estate Tax Due

*The applicable credit and exemption are zero for estates that opted out of the estate tax in 2010.

(Enter your answers in dollars, not millions of dollars.)