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The date of death for a widow was 2018. If the estate was valued at $2,221,000 and the estate was taxed at 40 percent, what was the heir's tax liability? Use Exhibit 19-6 for Estate Exemption. (Do not round intermediate calculations.) ..... ...... : i..........................

The date of death for a widow was 2018. If the estate was valued at $2,221,000 and the estate was taxed at 40 percent, what was the heir's tax liability? Use Exhibit 19-6 for Estate Exemption. (Do not round intermediate calculations.) ..... ...... : i..........................

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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The date of death for a widow was 2018. If the estate was valued at $2,221,000 and the estate was taxed at 40 percent, what was the heir's tax liability? Use Exhibit 19-6 for Estate Exemption. (Do not round intermediate calculations.) Estate tax liability
Transcribed Image Text:The date of death for a widow was 2018. If the estate was valued at $2,221,000 and the estate was taxed at 40 percent, what was the heir's tax liability? Use Exhibit 19-6 for Estate Exemption. (Do not round intermediate calculations.) Estate tax liability
Exhibit 19-6 Estate tax law changes The Tax Cuts and Jobs Act of 2017 and the Economic Growth and Tax Relief Reconciliation Act of 2001 brought important and significant changes to the federal estate, gift, and generation-skipping transfer (GST) taxes. Estate Highest Exemption Estate Unified or Тах Gift Credit GST Tax Exemption Amount ($ ($ million) million) Rate Exemption ($ million) Notes Tax Year (%) 2001 55 0.675 0.675 0.675 2002 50 1.00 1.00 1.00 Estate tax exemption raised to $1 million; top estate tax cut to 50%. 2003 49 1.00 1.00 1.00 Top estate tax cut to 49%. 2004 48 1.00 1.50 1.50 Estate tax exemption rises to $1.5 million; top estate tax rate cut to 48%. 2005 47 1.00 1.50 1.50 Top estate tax cut to 47%. 2006 46 1.00 2.00 2.00 Exemption rises to $2 million; top rate declines to 46%. 2007 45 1.00 2.00 2.000 Top rate declines to 45%. 2008 45 1.00 2.00 2.00 No change. 2009 45 1.00 3.50 3.50 Exemption rises to $3.5 million. 2010 1.00 Repeal Repeal Estate tax completely repealed. 2011 35 1.00 5.00 5.00 2012 35 5.12 5.12 5.12 5.25 5.25 5.25 Exemption rises to $5.25 million. Top estate tax 2013 40 rises to 40%. 2014 40 5.34 5.34 5.34 2015 40 5.43 5.43 5.43 2016 40 5.45 5.45 5.45 2017 40 5.49 5.49 5.49 2018 40 11.18 11.18 11.18 Indexed for inflation each year after 2018 through 2025. These amounts are doubled for a married couple. "Adjusted annuslly for inflation. Source: Internal Revenue Service, www.ira.gev, accessed June 26, 2018.
Transcribed Image Text:Exhibit 19-6 Estate tax law changes The Tax Cuts and Jobs Act of 2017 and the Economic Growth and Tax Relief Reconciliation Act of 2001 brought important and significant changes to the federal estate, gift, and generation-skipping transfer (GST) taxes. Estate Highest Exemption Estate Unified or Тах Gift Credit GST Tax Exemption Amount ($ ($ million) million) Rate Exemption ($ million) Notes Tax Year (%) 2001 55 0.675 0.675 0.675 2002 50 1.00 1.00 1.00 Estate tax exemption raised to $1 million; top estate tax cut to 50%. 2003 49 1.00 1.00 1.00 Top estate tax cut to 49%. 2004 48 1.00 1.50 1.50 Estate tax exemption rises to $1.5 million; top estate tax rate cut to 48%. 2005 47 1.00 1.50 1.50 Top estate tax cut to 47%. 2006 46 1.00 2.00 2.00 Exemption rises to $2 million; top rate declines to 46%. 2007 45 1.00 2.00 2.000 Top rate declines to 45%. 2008 45 1.00 2.00 2.00 No change. 2009 45 1.00 3.50 3.50 Exemption rises to $3.5 million. 2010 1.00 Repeal Repeal Estate tax completely repealed. 2011 35 1.00 5.00 5.00 2012 35 5.12 5.12 5.12 5.25 5.25 5.25 Exemption rises to $5.25 million. Top estate tax 2013 40 rises to 40%. 2014 40 5.34 5.34 5.34 2015 40 5.43 5.43 5.43 2016 40 5.45 5.45 5.45 2017 40 5.49 5.49 5.49 2018 40 11.18 11.18 11.18 Indexed for inflation each year after 2018 through 2025. These amounts are doubled for a married couple. "Adjusted annuslly for inflation. Source: Internal Revenue Service, www.ira.gev, accessed June 26, 2018.
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