Mary, a widow, died in 2023. Her personal representative filed a federal estate tax return showing the following: Gross estate $4,000,000 Funeral and administrative expenses $80,000 Unsecured debts due at death
Mary, a widow, died in 2023. Her personal representative filed a federal estate tax return showing the following: Gross estate $4,000,000 Funeral and administrative expenses $80,000 Unsecured debts due at death
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Mary, a widow, died in 2023. Her personal representative filed a federal estate tax return showing the following:
| Gross estate | $4,000,000 | |
| Funeral and administrative expenses | $80,000 | |
| Unsecured debts due at death | $120,000 | |
| Casualty losses ineligible for insurance reimbursement | $50,000 | |
| Adjusted gross estate | $3,750,000 | |
| Marital deduction | $100,000 | |
| Charitable deduction (not cash) | $250,000 | |
| State death taxes | $25,000 | |
| Taxable estate | $3,375,000 | |
| Adjusted taxable gifts | $325,000 | |
| Tax base | $3,700,000 | |
| Tentative tax | $1,425,800 | |
| Applicable Credit Amount | $4,769,800 | |
| Net estate tax due | $0 |
Based on this information, which one of these amounts most closely approximates the cash requirements for Mary's estate?
A)
$250,000
B)
$275,000
C)
$600,000
D)
$80,000
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