Estate Taxes – Computation of Estate Tax Payable (Answer All questions) (a) In 2017 Warren made $600,000 in taxable gifts but did not have to pay any gift tax. The unified credit was $4,577,800. In 2021, when Warren died, the gifted property was worth $825,000. Warren’s taxable estate was (gross estate minus estate tax deductions) was $11,580,000. The prevailing estate tax rate was 40%. (Show detail work to receive full credit
Estate Taxes – Computation of Estate Tax Payable (Answer All questions) (a) In 2017 Warren made $600,000 in taxable gifts but did not have to pay any gift tax. The unified credit was $4,577,800. In 2021, when Warren died, the gifted property was worth $825,000. Warren’s taxable estate was (gross estate minus estate tax deductions) was $11,580,000. The prevailing estate tax rate was 40%. (Show detail work to receive full credit
Chapter20: Income Taxation Of Trusts And Estates
Section: Chapter Questions
Problem 1CP
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Estate Taxes – Computation of Estate Tax Payable (Answer All questions)
(a) In 2017 Warren made $600,000 in taxable gifts but did not have to pay any gift tax. The unified credit was $4,577,800. In 2021, when Warren died, the gifted property was worth $825,000. Warren’s taxable estate was (gross estate minus estate tax deductions) was $11,580,000. The prevailing estate tax rate was 40%. (Show detail work to receive full credit)
HINT: Use the template below to compute Warren's estate tax payable in 2021
Taxable estate……………………………………$..................
Add: Adjustable taxable gifts……………………. ............
Total Estate Tax Base……………………………$ .................
Estate Tax Payable = [prevailing tax rate of 40% x Total Estate Tax Base) – (Unified credit)]
(b) Explain to an executor an advantage and a disadvantage of electing the alternate valuation date (Textbook C:13-6).
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