Required: Calculate the amount of estate tax due (if any) under the following alternatives. (Refer to Exhibit 25-1 and Exhibit 25-2.) (Enter your answers in dollars and not in millions of dollars.) a. Roland’s prior taxable gifts consist of a taxable gift of $1 million in 2005. b. Roland’s prior taxable gifts consist of a taxable gift of $1.5 million in 2005. c. Roland made a $1 million taxable gift in the
Required: Calculate the amount of estate tax due (if any) under the following alternatives. (Refer to Exhibit 25-1 and Exhibit 25-2.) (Enter your answers in dollars and not in millions of dollars.) a. Roland’s prior taxable gifts consist of a taxable gift of $1 million in 2005. b. Roland’s prior taxable gifts consist of a taxable gift of $1.5 million in 2005. c. Roland made a $1 million taxable gift in the
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Roland had a taxable estate of $16.2 million when he died this year.
Required:
Calculate the amount of estate tax due (if any) under the following alternatives. (Refer to Exhibit 25-1 and Exhibit 25-2.) (Enter your answers in dollars and not in millions of dollars.)
a. Roland’s prior taxable gifts consist of a taxable gift of $1 million in 2005.
b. Roland’s prior taxable gifts consist of a taxable gift of $1.5 million in 2005.
c. Roland made a $1 million taxable gift in the year prior to his death.
Transcribed Image Text:EXHIBIT 25-1 Unified Transfer Tax Rates*
Tax Base Equal to or Over
$0
10,000
20,000
40,000
60,000
80,000
100,000
150,000
250,000
500,000
750,000
1,000,000
Not Over
$10,000
20,000
40,000
60,000
80,000
100,000
150,000
250,000
500,000
750,000
1,000,000
Plus
18%
20
22
24
26
28
30
32
34
37
39
40
*The applicable credit and exemption are zero for estates that opted out of the estate tax in 2010.
Tentative Tax
$0
1,800
3,800
8,200
13,000
18,200
23,800
38,800
70,800
155,800
248,300
345,800
of Amount Over
$0
10,000
20,000
40,000
60,000
80,000
100,000
150,000
250,000
500,000
750,000
1,000,000
Transcribed Image Text:EXHIBIT 25-2 The Exemption Equivalent
Year of Transfer
Gift Tax
$500,000
600,000
625,000
650,000
675,000
1,000,000
1,000,000
1,000,000
1,000,000
5,000,000
5,120,000
5,250,000
5,340,000
5,430,000
5,450,000
5,490,000
11,180,000
11,400,000
11,580,000
11,700,000
Estate Tax
$500,000
600,000
625,000
650,000
675,000
1,000,000
1,500,000
2,000,000
3,500,000
2011
5,000,000
2012
5,120,000
2013
5,250,000
2014
5,340,000
2015
5,430,000
2016
5,450,000
2017
5,490,000
2018
11,180,000
2019
11,400,000
2020
11,580,000
2021
11,700,000
*The applicable credit and exemption are zero for taxpayers who opt out of the estate tax in 2010.
1986
1987-1997
1998
1999
2000-2001
2002-2003
2004-2005
2006-2008
2009-2010*
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Would the exclusion be 11,700,000 assuming Rolands death was in 2021 according to the chart?
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