Harold and Maude were married and lived in a common-law state. Maude died in 2018 with a taxable estate of $25.80 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 $25.80 million to their three children. 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.

Harold and Maude were married and lived in a common-law state. Maude died in 2018 with a taxable estate of $25.80 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 $25.80 million to their three children. 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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Harold and Maude were married and lived in a common-law state. Maude died in 2018 with a taxable estate of $26.00 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 $26.00 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. Estate tax if no taxable gifts were made Estate tax if taxable gifts were made $ 5,928,000 $ 0
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Wayne and Carol have been married for 60 years. At Carol's passing (and Wayne surviving) all of the assets, worth $40 Million, are either titled as Joint Tenancy with Rights of Survivorship or are held in Wayne's name only. There have been no taxable gifts made during lifetime. a. Would Carol's estate have any estate tax liability? b. Have Wayne and Carol failed to optimize Carol's exemption? c. What election could the executor of Carol's estate make to remediate the problem with how assets were held to potentially reduce the survivor's eventual estate tax?
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Hal and Wendy are married, and they own a parcel of realty, Blackacre, as joint tenants with the right of survivorship. Hal owns an additional parcel of realty, Redacre, in his name alone. Suppose Hal should die when Blackacre is worth $800,000 and Redacre is worth $725,000, what value of realty would be included in Hal's probate estate? Same facts as the prior question, what value would be included in Hal's gross taxable estate?