Question
Vince and Millie are married. Vince dies this year with a gross estate of $25 million and no adjusted prior gifts. Assume the estate qualifies
Vince and Millie are married. Vince dies this year with a gross estate of $25 million and no adjusted prior gifts. Assume the estate qualifies for the martial deduction.
Calculate the amount of estate tax due (if any) under the following alternative conditions: (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 |
*The applicable credit and exemption are zero for estates that opted out of the estate tax in 2010.
EXHIBIT 25-2 The Exemption Equivalent / Applicable Exclusion Amount
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 |
2022 | 12,060,000 | 12,060,000 |
*The estate tax was optional for decedents dying in 2010. In lieu of the estate tax, executors could opt to have the adjusted tax basis of the assets in the gross estate carry over to the heirs of the decedent. The applicable credit and exemption are zero for taxpayers who opt out of the estate tax in 2010.
Required:
Vince leaves $10 million to Millie and the remainder to his son, Paul.
Vince leaves $10 million to Millie and the remainder to a trust whose trustee is required to pay income to Millie for her life and the remainder to Paul.
Note: For all requirements, enter your answer in millions rounded to 3 decimal places. Leave no answer blank. Enter zero if applicable.
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