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, the real estate to his church, The First Church of Methodology, and the remainder of his assets were to be placed in trust for his three children. Tom's estate consisted of the following:

Please look up exhibit 25-1 Unified Transfers Rates and 25-2 exemption equivalent

Assets:

Personal assets $1,520,000

Cash and stock26,200,000

Intangible assets (film rights)82,500,000

Real estate17,200,000

$127,420,000

Liabilities:

Mortgage $5,400,000

Other liabilities6,300,000

$11,700,000

a.Tom made a taxable gift of $7.30 million in 2011. Compute the estate tax for Tom's estate.(Refer toExhibit 25-1andExhibit 25-2.)

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