Harold and Maude were married and lived in a common-law state. Maude died in 2018 with a taxable estate of $25 million and left it all to Harold. Maude's executor filed a timely estate tax return claiming the marital deduction for the property left to Harold including a valid portability election. Harold died this year, leaving the entire $25 million to their three children.(Refer to Exhibit 25-1 and Exhibit 25-2.) Calculate how much estate tax is due from Harold's estate under the following two alternatives. a. Assume that neither Harold nor Maude had made any taxable gifts prior to this year. b. Assume that Harold and Maude each made a $1 million taxable gift in 2011 and offset the gift tax at that time with the applicable credit. Note: For all requirements, enter your answers in dollars and not in millions of dollars. Answer is complete but not entirely correct. Estate tax if no taxable gifts were made Estate tax if taxable gifts were made $ 360,000 ( $1,200,000
Harold and Maude were married and lived in a common-law state. Maude died in 2018 with a taxable estate of $25 million and left it all to Harold. Maude's executor filed a timely estate tax return claiming the marital deduction for the property left to Harold including a valid portability election. Harold died this year, leaving the entire $25 million to their three children.(Refer to Exhibit 25-1 and Exhibit 25-2.) Calculate how much estate tax is due from Harold's estate under the following two alternatives. a. Assume that neither Harold nor Maude had made any taxable gifts prior to this year. b. Assume that Harold and Maude each made a $1 million taxable gift in 2011 and offset the gift tax at that time with the applicable credit. Note: For all requirements, enter your answers in dollars and not in millions of dollars. Answer is complete but not entirely correct. Estate tax if no taxable gifts were made Estate tax if taxable gifts were made $ 360,000 ( $1,200,000
Chapter19: Family Tax Planning
Section: Chapter Questions
Problem 35P
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19
Transcribed Image Text:Harold and Maude were married and lived in a common-law state. Maude died in 2018 with a
taxable estate of $25 million and left it all to Harold. Maude's executor filed a timely estate tax
return claiming the marital deduction for the property left to Harold including a valid portability
election. Harold died this year, leaving the entire $25 million to their three children.(Refer to
Exhibit 25-1 and Exhibit 25-2.)
Calculate how much estate tax is due from Harold's estate under the following two
alternatives.
a. Assume that neither Harold nor Maude had made any taxable gifts prior to this year.
b. Assume that Harold and Maude each made a $1 million taxable gift in 2011 and offset the
gift tax at that time with the applicable credit.
Note: For all requirements, enter your answers in dollars and not in millions of dollars.
Answer is complete but not entirely correct.
Estate tax if no taxable gifts were made
Estate tax if taxable gifts were made
$ 360,000 (
$1,200,000
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