Xerxes Stogner died in 2012, leaving an estate of $27,000,000. Xerxes's wife died in 2009. In 2009, Xerxes gave his son property that resulted in a taxable gift of $6,000,000 and upon which Xerxes paid $1,300,000 in transfer taxes. Xerxes had made no other taxable gifts during his life. Xerxes's will provided a charitable bequest of $900,000 to a museum of natural history, Exhibits - Tax schedules and credits Exhibit 15.7 - Federal Unified Transfer Tax Rates: Exhibit 15.8 - Unified Credits and Applicable Exclusion Amounts Tentative Tax Taxable Estate Value More Than But Not More Than Base Amount + Percent On Excess Over $0 $0 10,000 20,000 10,000 1,800 20% 20,000 22% 3,800 8,200 13,000 40,000 60,000 24% 26% 80,000 40,000 60,000 80,000 100,000 150,000 250,000 500,000 28% 18,200 23,800 $10,000 20,000 40,000 60,000 80,000 100,000 150,000 250,000 500,000 100,000 30% 150,000 38,800 32% 250,000 70,800 34% 500,000 155,800 37% chantable bequest of $900,000 to a museum of natural history. Exhibits - Tax schedules and credits Exhibit 15.8 -- Unified Credits and Applicable Exclusion Amounts for Estates and Gifts Exhibit 15.7 - Federal Unified Transfer Tax Rates: Year 2006 Unified TaxCredit- Estates $780,800 $780,800 $780,800 $1,455,800 Estate tax repealed for 2010 Applicable ExclusionAmount- Estates $2,000,000 $2,000,000 $2,000,000 $3,500,000 Unified TaxCredit- Gifts $345,800 $345,800 $345,800 2007 Applicable ExclusionAmount -Gifts $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 2008 2009 $345,800 $330,800 2010 2011 2012 $1,730,800 $1,772,800 $2,045,800 $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 to determine the federal transfer tax on Xerxes Stogner's estate. (Hint: Enter a value of $0 for any line that does not apply Name: Xerxes Computation Computing Federal Estate Tax Due Date: 11/30/2011 Item Amount Line Total Amount 1 2 3 Gross estate Subtract sum of: (a) Funeral expenses (b) Administrative expenses (c) Debts (d) Other expenses Total: Result: Adjusted gross estate Subtract sum of: (a) Marital deduction (b) Charitable deduction Total: Result: Taxable estate Add: Adjusted taxable gifts (post-1976) Result: Estate tax base Compute: Tentative tax on estate tax base" Subtract sum of: (a) Gift tax payable on post-1976 gifts (b) Unified tax credit Total: Result: Total estate taxes Subtract: Other credits 5 $ 6 5 7 8 9 10 11 AGE MINDTAP Ch 15: Assignment - Preserving Your Estate (d) Other expenses Total: 3 Result: 4 Subtract sum of: $ 5 Result: 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 6 Add: 7 Result: $ 8 Compute: Subtract sum of: 9 $ Total: 10 Result: $ 11 Subtract: Total estate taxes Other credits Federal estate tax due (s 12 Result: Use Exhibit 15.7 to calculate the tentative tax. Use Exhibit 15.8 to determine the appropriate unified tax credit Xerxes Stogner died in 2012, leaving an estate of $27,000,000. Xerxes's wife died in 2009. In 2009, Xerxes gave his son property that resulted in a taxable gift of $6,000,000 and upon which Xerxes paid $1,300,000 in transfer taxes. Xerxes had made no other taxable gifts during his life. Xerxes's will provided a charitable bequest of $900,000 to a museum of natural history, Exhibits - Tax schedules and credits Exhibit 15.7 - Federal Unified Transfer Tax Rates: Exhibit 15.8 - Unified Credits and Applicable Exclusion Amounts Tentative Tax Taxable Estate Value More Than But Not More Than Base Amount + Percent On Excess Over $0 $0 10,000 20,000 10,000 1,800 20% 20,000 22% 3,800 8,200 13,000 40,000 60,000 24% 26% 80,000 40,000 60,000 80,000 100,000 150,000 250,000 500,000 28% 18,200 23,800 $10,000 20,000 40,000 60,000 80,000 100,000 150,000 250,000 500,000 100,000 30% 150,000 38,800 32% 250,000 70,800 34% 500,000 155,800 37% chantable bequest of $900,000 to a museum of natural history. Exhibits - Tax schedules and credits Exhibit 15.8 -- Unified Credits and Applicable Exclusion Amounts for Estates and Gifts Exhibit 15.7 - Federal Unified Transfer Tax Rates: Year 2006 Unified TaxCredit- Estates $780,800 $780,800 $780,800 $1,455,800 Estate tax repealed for 2010 Applicable ExclusionAmount- Estates $2,000,000 $2,000,000 $2,000,000 $3,500,000 Unified TaxCredit- Gifts $345,800 $345,800 $345,800 2007 Applicable ExclusionAmount -Gifts $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 2008 2009 $345,800 $330,800 2010 2011 2012 $1,730,800 $1,772,800 $2,045,800 $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 to determine the federal transfer tax on Xerxes Stogner's estate. (Hint: Enter a value of $0 for any line that does not apply Name: Xerxes Computation Computing Federal Estate Tax Due Date: 11/30/2011 Item Amount Line Total Amount 1 2 3 Gross estate Subtract sum of: (a) Funeral expenses (b) Administrative expenses (c) Debts (d) Other expenses Total: Result: Adjusted gross estate Subtract sum of: (a) Marital deduction (b) Charitable deduction Total: Result: Taxable estate Add: Adjusted taxable gifts (post-1976) Result: Estate tax base Compute: Tentative tax on estate tax base" Subtract sum of: (a) Gift tax payable on post-1976 gifts (b) Unified tax credit Total: Result: Total estate taxes Subtract: Other credits 5 $ 6 5 7 8 9 10 11 AGE MINDTAP Ch 15: Assignment - Preserving Your Estate (d) Other expenses Total: 3 Result: 4 Subtract sum of: $ 5 Result: 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 6 Add: 7 Result: $ 8 Compute: Subtract sum of: 9 $ Total: 10 Result: $ 11 Subtract: Total estate taxes Other credits Federal estate tax due (s 12 Result: Use Exhibit 15.7 to calculate the tentative tax. Use Exhibit 15.8 to determine the appropriate unified tax credit