When Gregory Zahedani 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. 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 10,000 $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% 250,000 500,000 155,800 37% 500,000 Exhibit 15.7 Federal Unified Transfer Tax Rates: Exhibit 15.8 Unified Credits and Applicable Exclusion Amounts for Estates and Gifts: Unified TaxCredit- Gifts $345,800 $345,800 Year 2006 2007 2008 2009 2010 Applicable ExclusionAmount- Estates $2,000,000 $2,000,000 $2,000,000 $3,500,000 Unified TaxCredit- Estates $780,800 $780,800 $780,800 $1,455,800 Estate tax repealed for 2010 $1,730,800 $1,772,800 $2,045,800 Applicable ExclusionAmount -Gifts $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $345,800 $345,800 $330,800 2011 2012 $5,000,000 $5,120,000 $5,250,000 $1,730,800 $1,772,800 $2,045,800 $5,000,000 $5,120,000 $5,250,000 2013 Use the following worksheet and Exhibits 15.7 and 15.8 in your textbook to calculate the federal estate tax due on Gregory Zahedani's estate. (Hint: Enter a value of $0 for any line that does not apply.) Date: 11/30/2012 Amount Total Amount ) 3 Computing Federal Estate Tax Due Name: Gregory Zahedani Line Computation Item 1 Gross estate 2 Subtract sum of: (a) Funeral expenses (b) Administrative expenses (c) Debts (d) Other expenses Total: Result: Adjusted gross estate 4 Subtract sum of: (a) Marital deduction (b) Charitable deduction Total: Result: Taxable estate 6 Add: Adjusted taxable gifts (post-1976) 7 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 (5 $ 5 S $ 8 $ $ S Use Exhibit 15.7 to calculate the tentative tax. Use Exhibit 15.8 to determine the appropriate unified tax credit. When Gregory Zahedani 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. 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 10,000 $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% 250,000 500,000 155,800 37% 500,000 Exhibit 15.7 Federal Unified Transfer Tax Rates: Exhibit 15.8 Unified Credits and Applicable Exclusion Amounts for Estates and Gifts: Unified TaxCredit- Gifts $345,800 $345,800 Year 2006 2007 2008 2009 2010 Applicable ExclusionAmount- Estates $2,000,000 $2,000,000 $2,000,000 $3,500,000 Unified TaxCredit- Estates $780,800 $780,800 $780,800 $1,455,800 Estate tax repealed for 2010 $1,730,800 $1,772,800 $2,045,800 Applicable ExclusionAmount -Gifts $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $345,800 $345,800 $330,800 2011 2012 $5,000,000 $5,120,000 $5,250,000 $1,730,800 $1,772,800 $2,045,800 $5,000,000 $5,120,000 $5,250,000 2013 Use the following worksheet and Exhibits 15.7 and 15.8 in your textbook to calculate the federal estate tax due on Gregory Zahedani's estate. (Hint: Enter a value of $0 for any line that does not apply.) Date: 11/30/2012 Amount Total Amount ) 3 Computing Federal Estate Tax Due Name: Gregory Zahedani Line Computation Item 1 Gross estate 2 Subtract sum of: (a) Funeral expenses (b) Administrative expenses (c) Debts (d) Other expenses Total: Result: Adjusted gross estate 4 Subtract sum of: (a) Marital deduction (b) Charitable deduction Total: Result: Taxable estate 6 Add: Adjusted taxable gifts (post-1976) 7 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 (5 $ 5 S $ 8 $ $ S Use Exhibit 15.7 to calculate the tentative tax. Use Exhibit 15.8 to determine the appropriate unified tax credit