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, Kaffle, 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. Tom's estate consisted of the following: Assets: Personal assets Cash and stock Intangible assets (film rights) Real estate $ 1,52e, eee 26, 2ee, eee 82,5ee, eee 17, 2ee, eee $ 127,420,00 Liabilities: Mortgage Other liabilities $ 5,400, eee 6,3ee, eee 11,700, eee $ a. Tom made a taxable gift of $7.30 million in 2011. Compute the estate tax for Tom's estate. (Refer to Exhibit 25-1 and Exhibit 25-2) (Enter your answers in dollars, not millions of dollars.) 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 ostate tax Applicable credit (tax on $11,58 million) Estate Tax Due $ 127,420,000 26,200,000 (17,200,000) 11,700,000 $ 72,320,000 7,300,000 $ 79,620,000 Iction/bne/accounting/spilker 12e/exhibit 25_1.htm EXHIBIT 25-1 Unified Transfer Tax Rates Tax Base Equal to or Over Not Over Tentative Tax Plus S 0 $10,000 S 0 18% 10.000 20,000 1.800 20 20,000 40,000 3,800 22 40.000 60,000 8.200 24 60,000 80,000 13,000 26 80,000 100,000 18,200 28 100.000 150,000 23.800 30 150,000 250,000 38,800 32 250,000 500,000 70.800 34 500,000 750,000 155,800 37 750,000 1.000.000 248.300 39 1,000,000 345,800 40 *The applicable credit and exemption are cero for estates that opted out of the estate tax in 2010 of Amount Over S 0 10,000 20.000 40,000 60,000 80,000 100,000 150,000 250,000 500,000 750,000 1,000,000 Ha/Lonnect_Production/bne/accounting/spilker_12 EXHIBIT 25-2 The Exemption Equivalent Year of Transfer Gift Tax Estate Tax 1986 $500,000 $500,000 1987-1997 600,000 600,000 1998 625.000 625,000 1999 650,000 650,000 2000-2001 675,000 675,000 2002-2003 1,000,000 1,000,000 2004-2005 1,000,000 1,500,000 2006-2008 1,000,000 2,000,000 2009-2010 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 *The applicable credit and exemption are zero for taxpayers who opt out of the estate fax in 2010 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, Kaffle, 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. Tom's estate consisted of the following: Assets: Personal assets Cash and stock Intangible assets (film rights) Real estate $ 1,52e, eee 26, 2ee, eee 82,5ee, eee 17, 2ee, eee $ 127,420,00 Liabilities: Mortgage Other liabilities $ 5,400, eee 6,3ee, eee 11,700, eee $ a. Tom made a taxable gift of $7.30 million in 2011. Compute the estate tax for Tom's estate. (Refer to Exhibit 25-1 and Exhibit 25-2) (Enter your answers in dollars, not millions of dollars.) 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 ostate tax Applicable credit (tax on $11,58 million) Estate Tax Due $ 127,420,000 26,200,000 (17,200,000) 11,700,000 $ 72,320,000 7,300,000 $ 79,620,000 Iction/bne/accounting/spilker 12e/exhibit 25_1.htm EXHIBIT 25-1 Unified Transfer Tax Rates Tax Base Equal to or Over Not Over Tentative Tax Plus S 0 $10,000 S 0 18% 10.000 20,000 1.800 20 20,000 40,000 3,800 22 40.000 60,000 8.200 24 60,000 80,000 13,000 26 80,000 100,000 18,200 28 100.000 150,000 23.800 30 150,000 250,000 38,800 32 250,000 500,000 70.800 34 500,000 750,000 155,800 37 750,000 1.000.000 248.300 39 1,000,000 345,800 40 *The applicable credit and exemption are cero for estates that opted out of the estate tax in 2010 of Amount Over S 0 10,000 20.000 40,000 60,000 80,000 100,000 150,000 250,000 500,000 750,000 1,000,000 Ha/Lonnect_Production/bne/accounting/spilker_12 EXHIBIT 25-2 The Exemption Equivalent Year of Transfer Gift Tax Estate Tax 1986 $500,000 $500,000 1987-1997 600,000 600,000 1998 625.000 625,000 1999 650,000 650,000 2000-2001 675,000 675,000 2002-2003 1,000,000 1,000,000 2004-2005 1,000,000 1,500,000 2006-2008 1,000,000 2,000,000 2009-2010 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 *The applicable credit and exemption are zero for taxpayers who opt out of the estate fax in 2010