When Arthur Salvatore died in 2012, he left an estate valued at $20,000,000. His trust directed distribution as follows: $200,000 in charitable deductions ($75,000 to the local hospital plus $125,000 to his alma mater), and the remainder to his four adult children. Death-related costs were $7,500 for funeral expenses, and $100,000 in administrative expenses ($50,000 paid to attorneys, $10,000 paid to accountants, and $40,000 paid to the trustee of his living trust. In addition, there were debts of $450,000. L-E Use the following dropdown menus to obtain the relevant tax schedules and credits: Exhibits - Tax schedules and credits Exhibit 15.7 - Federal Unified Transfer Tax Rates: Exhibit 15.8 -- Unified Credits and Applicable Exclusion Amounts for Estates and Gifts: Taxable Estate Value Tentative Tax More Than But Not More Than Base Amount + Percent On Excess Over $0 $0 1,800 20% $10,000 3,800 22% 20,000 8,200 24% 10,000 20,000 40,000 60,000 80,000 100,000 150,000 250,000 500,000 13,000 10,000 20,000 40,000 60,000 80,000 100,000 150,000 250,000 500,000 26% 18,200 28% 30% 40,000 60,000 80,000 100,000 150,000 250,000 500,000 23,800 38,800 70,800 155,800 32% 34% 37% Q Sea 15: Assignment - Preserving Your Estate Use the following dropdown menus to obtain the relevant tax schedules and credits: Exhibits - Tax schedules and credits Exhibit 15.7 - Federal Unified Transfer Tax Rates: Exhibit 15.8 - Unified Credits and Applicable Exclusion Amounts for Estates and Gift Unified TaxCredit- Estates Applicable ExclusionAmount- Estates Year Unified TaxCredit- Gifts Applicable ExclusionAmount -Gifts 2006 $2,000,000 $345,800 2007 $345,800 $2,000,000 $2,000,000 2008 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $345,800 2009 $3,500,000 $780,800 $780,800 $780,800 $1,455,800 Estate tax repealed for 2010 $1,730,800 $1,772,800 $2,045,800 $345,800 $330,800 2010 $1,000,000 2011 $5,000,000 2012 2013 $5,000,000 $5,120,000 $5,250,000 $1,730,800 $1,772,800 $2,045,800 $5,120,000 $5,250,000 Use the following worksheet and Exhibits 15.7 and 15.8 in your textbook to calculate the federal estate tax due on Arthur Salvatore estate. (Hint: Enter a value of so for any line that does not apply) dtv AW NO in Computing Federal Estate Tax Due Date: 11/30/2012 Name: Arthur Salvatore Line Computation Item Amount Total Amount 1 Gross estate 2 Subtract sum of: 3 Result: 4 Subtract sum of: (a) Funeral expenses (b) Administrative expenses (c) Debts (d) Other expenses Total: Adjusted gross estate (a) Marital deduction (b) Charitable deduction Total: Taxable estate Adjusted taxable gifts (post-1976) Estate tax base Tentative tax on estate tax base" (a) Gift tax payable on post-1976 gifts (b) Unified tax credit Total: Total estate taxes Other credits 5 Result: 5 6 Add: $ 7 Result: $ 8 $ Compute: Subtract sum of: 9 10 Result: 11 Subtract: 3 Ch 15: Assignment - Preserving Your Estate (d) Other expenses Total: Result: Adjusted gross estate 4 Subtract sum of: (a) Marital deduction (b) Charitable deduction Total: 5 Result: Taxable estate 6 Add: Adjusted taxable gifts (post-1976) Result: Estate tax base Compute: Tentative tax on estate tax base" 9 Subtract sum of: (a) Gift tax payable on post-1976 gifts (b) Unified tax credit Total: 10 Result: Total estate taxes 11 Subtract: Other credits 12 Result: Federal estate tax due 3 7 S 8 5 Use Exhibit 15.7 to calculate the tentative tax. Use Exhibit 15.8 to determine the appropriate unified tax credit
