[The following information applies to the questions displayed below.] In 2010 Casey made a taxable gift of $5.7 million to both Stephanie and Linda (a total of $11.4 million in taxable gifts). Required: Calculate the amount of gift tax due this year and Casey's unused exemption equivalent under the following alternatives. (Refer to Exhibit 25-1 and Exhibit 25-2;) (Enter your answers in dollars, not millions of dollars. Leave no answer blank. Enter zero if applicable.) a. This year Casey made a taxable gift of $1 million to Stephanie. Casey is not married, and the 2010 gift was the only other taxable gift he has ever made. Gift tax due $ Unused exemption equivalent

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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[The following information applies to the questions displayed below.]
In 2010 Casey made a taxable gift of $5.7 million to both Stephanie and Linda (a total of $11.4 million in taxable gifts).
Required:
Calculate the amount of gift tax due this year and Casey's unused exemption equivalent under the following alternatives.
(Refer to Exhibit 25-1 and:Exhibit 25-2;) (Enter your answers in dollars, not millions of dollars. Leave no answer blank.
Enter zero if applicable.)'
a. This year Casey made a taxable gift of $1 million to Stephanie. Casey is not married, and the 2010 gift was the only other taxable gift
he has ever made.
Gift tax due
$
Unused exemption equivalent
Transcribed Image Text:[The following information applies to the questions displayed below.] In 2010 Casey made a taxable gift of $5.7 million to both Stephanie and Linda (a total of $11.4 million in taxable gifts). Required: Calculate the amount of gift tax due this year and Casey's unused exemption equivalent under the following alternatives. (Refer to Exhibit 25-1 and:Exhibit 25-2;) (Enter your answers in dollars, not millions of dollars. Leave no answer blank. Enter zero if applicable.)' a. This year Casey made a taxable gift of $1 million to Stephanie. Casey is not married, and the 2010 gift was the only other taxable gift he has ever made. Gift tax due $ Unused exemption equivalent
EXHIBIT 25-2 The Exemption Equivalent
Year of Transfer
Gift Tax
Estate Tax
1986
$500,000
$500,000
EXHIBIT 25-1 Unified Transfer Tax Rates*
1987–1997
600,000
600,000
Tax Base Equal to or Over
Not Over
Tentative Tax
Plus
of Amount Over
1998
625,000
625,000
$
$10,000
$
18%
$ 0
1999
650,000
650,000
10,000
20,000
1,800
20
10,000
2000–2001
675,000
675,000
20,000
40,000
3,800
22
20,000
2002-2003
1,000,000
1,000,000
40,000
60,000
8,200
24
40,000
2004-2005
1,000,000
1,500,000
60,000
80,000
13,000
26
60,000
2006-2008
1,000,000
2,000,000
80,000
100,000
18,200
28
80,000
2009-2010*
1,000,000
3,500,000
100,000
150,000
23,800
30
100,000
2011
5,000,000
5,000,000
150,000
250,000
38,800
32
150,000
2012
5,120,000
5,120,000
250,000
500,000
70,800
34
250,000
2013
5,250,000
5,250,000
500,000
750,000
155,800
37
500,000
2014
5,340,000
5,340,000
750,000
1,000,000
248,300
39
750,000
2015
5,430,000
5,430,000
1,000,000
345,800
40
1,000,000
2016
5,450,000
5,450,000
*The applicable credit and exemption are zero for estates that opted out of the estate tax in 2010.
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
*The applicable credit and exemption are zero for taxpayers who opt out of the estate tax in 2010.
Transcribed Image Text:EXHIBIT 25-2 The Exemption Equivalent Year of Transfer Gift Tax Estate Tax 1986 $500,000 $500,000 EXHIBIT 25-1 Unified Transfer Tax Rates* 1987–1997 600,000 600,000 Tax Base Equal to or Over Not Over Tentative Tax Plus of Amount Over 1998 625,000 625,000 $ $10,000 $ 18% $ 0 1999 650,000 650,000 10,000 20,000 1,800 20 10,000 2000–2001 675,000 675,000 20,000 40,000 3,800 22 20,000 2002-2003 1,000,000 1,000,000 40,000 60,000 8,200 24 40,000 2004-2005 1,000,000 1,500,000 60,000 80,000 13,000 26 60,000 2006-2008 1,000,000 2,000,000 80,000 100,000 18,200 28 80,000 2009-2010* 1,000,000 3,500,000 100,000 150,000 23,800 30 100,000 2011 5,000,000 5,000,000 150,000 250,000 38,800 32 150,000 2012 5,120,000 5,120,000 250,000 500,000 70,800 34 250,000 2013 5,250,000 5,250,000 500,000 750,000 155,800 37 500,000 2014 5,340,000 5,340,000 750,000 1,000,000 248,300 39 750,000 2015 5,430,000 5,430,000 1,000,000 345,800 40 1,000,000 2016 5,450,000 5,450,000 *The applicable credit and exemption are zero for estates that opted out of the estate tax in 2010. 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 *The applicable credit and exemption are zero for taxpayers who opt out of the estate tax in 2010.
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