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Diego is a single individual who owns a life insurance policy worth $$2\mathrm{.}52$ million that will be worth $$8$ million upon his death. This year Diego EXHIBIT $25-1$ Unified Transfer Tax Rates$*$ EXHIBIT $25-2$ The Exemption Equivalent $/$ Applicable Exclusion Amount

$\backslash$table$[[$Year of Transfer,Gift Tax,Estate Tax$],[1986,$$$500,000,$$$500,000],[1987-1997,600,000,600,000],[1998,625,000,625,000],[1999,650,000,650,000],[2000-2001,675,000,675,000],[2002-2003,1,000,000,1,000,000],[2004-2005,1,000,000,1,500,000],[2006-2008,1,000,000,2,000,000],[2009-2010*,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],[2023,12,920,000,12,920,000]]$

$*$The estate tax was optional for decedents dying in $2010.$ In lieu of the estate tax, executors could opt to

transferred the policy and all incidents of ownership to an irrevocable trust that pays income annually to Diego's two children for $15$ years and

then distributes the corpus to the children in equal shares. Assume that Diego has made only one prior taxable gift of $$15$ million in January of

$($Refer to Exhibit $25-1$ and Exhibit $25-2.)$

Required:

a$.$ Calculate the amount of glft tax due $($if any$)$ on the transfer of the insurance policy.

b$.$ Diego died unexpectedly this year after transferring the policy. At the time of death, Diego's probate estate was $$25$ million, to be divided in

equal shares between Diego's two children. Calculate the amount of cumulative taxable transfers for estate tax purposes.

Note: For all requirements, enter your answers in dollars and not in millions of dollars.

D$.$ Amount or cumulative taxadie transters tor estate tax purposes

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