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9. Computing the federal transfer tax - Practice 2 Trevor Wesson died in 2012, leaving an estate of $21,000,000. Trevor's wife died in 2009. In 2009, Trevor gave his son property that resulted in a taxable gift of $4,000,000 and upon which Trevor paid $950,000 in transfer taxes. Trevor had made no other taxable gifts during his life. Trevor's will provided a charitable bequest of $500,000 to his synagogue. Exhibits - Tax schedules and credits Exhibit 157 - 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 10,000 20,000 1,800 20% 40,000 22% 3,800 8,200 13,000 $10,000 20,000 40,000 60,000 24% 26% 10,000 20,000 40,000 60,000 80,000 100,000 150,000 250,000 500,000 28% 30,000 60,000 80,000 100,000 150,000 250,000 500,000 18,200 23,800 30% 38,800 32% 100,000 150,000 250,000 500,000 34% 70,800 155,800 37% Use the following worksheet and Exhibits 15.7 and 15.8 to determine the federal transfer tax on Trevor Wesson's estate. (Hint: Enter a value of 30 for 9. Computing the federal transfer tax - Practice 2 Trevor Wesson died in 2012, leaving an estate of $21,000,000. Trevor's wife died in 2009. In 2009, Trevor gave his son property that resulted in a taxable gift of $4,000,000 and upon which Trevor paid $950,000 in transfer taxes. Trevor had made no other taxable gifts during his life. Trevor's will provided a charitable bequest of $500,000 to his synagogue. Exhibits - Tax schedules and credits Exhibit 15.7 - Federal Unified Transfer Tax Rates Excutit 15 8 -- Unified Credits and Applicable Exclusion Amounts for Estates and Caitts Unified TaxCredit- Estates Year 2006 $780,800 Applicable Exclusion Amount- Estates $2,000,000 $2,000,000 $2,000,000 $3,500,000 2007 $780,800 $780,800 Unified TaxCredit- Gifts $345,800 $345,800 $345,800 $345,800 $330,800 Applicable ExclusionAmount --Gifts $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 2008 2009 2010 $1,455,800 Estate tax repealed for 2010 $1,730,800 $1,772,800 $2,045,800 2011 2012 $5,000,000 $5,120,000 $5,250,000 $1,730,800 $1,772,800 $2,045,800 $5,000,000 $5,120,000 $5,250,000 2013 Use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 to determine the federal transfer tax on Trevor Wesson's estate. (Hint: Enter a value of so for any line that does not apply) Use the following worksheet and Exhibits 15.7 and 15.8 to determine the federal transfer tax on Trevor Wesson's estate. (Hint: Enter a value of $0 for any line that does not apply.) Name: Trevor Computation Line Total Amount 1 $ 2 Subtract sum of: Computing Federal Estate Tax Due Date: 11/30/2011 Item Amount Gross estate (a) Funeral expenses (b) Administrative expenses (c) Debts $ (a) Other expenses $ Total: 3 Result: Adjusted gross estate S 4 Subtract sum of $ 5 Result: $ 6 Add: $ (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: 7 Result S 8 $ Compute: Subtract sum of 9 S $ 10 Result: Total estate taxes 11 Subtract Other credits CS 12 Result Federal estate tax due Use Exhibit 15.7 to calculate the tentative tax Use Exhibit 15.6 to determine the appropriate unified tax credit

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