(a) To determine: Gross value of M’s estate. Introduction: Estate is the sum total of all the money, assets and properties held by a person expressed in monetary terms.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 16, Problem 3PA

Summary Introduction

(a)

To determine:

Gross value of M’s estate.

Introduction:

Estate is the sum total of all the money, assets and properties held by a person expressed in monetary terms.

Expert Solution

Explanation of Solution

Given,

Value of assess at the time of M’s death is $8,600,000.

Cost of her funeral is $18,000.

Estate administration cost is $52,000.

Amount for charities as per will is $1,000,000.

Gross value of estate is the total value of all the assets and properties which are left behind after the death of a person.

Hence, the gross value of M’s estate would be $8,600,000.

Conclusion

Thus, the total gross value of M’s estate will be the total value of all the assets left over after her death which is $8,600,000.

Summary Introduction

(b)

To determine:

Taxable value of M’s estate.

Introduction:

Taxable value

is the value of an estate of a person after eligible deductions upon which the tax is charged.

Expert Solution

Explanation of Solution

Given,

Value of assess at the time of M’s death is $8,600,000.

Cost of her funeral is $18,000.

Estate administration cost is $52,000.

Amount for charities as per will is $1,000,000.

Taxable value of estate is calculated after making several adjustments to the gross value of estate and it will be,

Particulars	Amount ($)
13. Calculate gross value of estate
j. Value of gross estate	8,600,000
14. Calculate taxable estate
Less:
Funeral expenses	18,000
Estate administration expenses	52,000
Taxes	Nil
Charitable deductions	1,000,000
k. Taxable estate	7,530,000
15. Calculate gift adjusted taxable estate
Plus: Amount of gift in excess of annual deduction	Nil
Less: Estate tax free transfer threshold	Nil
l. Gift adjusted taxable estate	7,530,000

Table (1)

Hence, the taxable estate value is $7,530,000.

Conclusion

Thus, the taxable value of M’s estate after all eligible deductions is $7,530,000.

Summary Introduction

(c)

To determine:

Gift adjusted taxable value of M’s estate.

Introduction:

Gift

is a present willingly given to someone without receiving any monetary return or consideration against it.

Expert Solution

Explanation of Solution

Given,

Value of assess at the time of M’s death is $8,600,000.

Cost of her funeral is $18,000.

Estate administration cost is $52,000.

Amount for charities as per will is $1,000,000.

Taxable value of gift adjusted taxable estate is calculated after making several adjustments to the gross value of estate and it will be,

Particulars	Amount ($)
1. Calculate gross value of estate
a. Value of gross estate	8,600,000
2. Calculate taxable estate
Less:
Funeral expenses	18,000
Estate administration expenses	52,000
Taxes	Nil
Charitable deductions	1,000,000
b. Taxable estate	7,530,000
3. Calculate gift adjusted taxable estate
Plus: Amount of gift in excess of annual deduction	Nil
Less: Estate tax free transfer threshold	5,340,000
c. Gift adjusted taxable estate	2,190,000

Table (2)

Hence, the taxable estate value is $2,190,000.

Conclusion

Thus, the taxable value of M’s gross gift adjusted estate after all eligible deductions is $2,190,000.

Summary Introduction

(d)

To determine:

Taxable value of M’s estate after his death

Expert Solution

Explanation of Solution

Given,

Value of assess at the time of M’s death is $8,600,000.

Cost of her funeral is $18,000.

Estate administration cost is $52,000.

Amount for charities as per will is $1,000,000.

Taxable value of estate after the death of M is calculated after making several adjustments to the gross value of estate and it will be,

Particulars	Amount ($)
1. Calculate gross value of estate
a. Value of gross estate	8,600,000
2. Calculate taxable estate
Less:
Funeral expenses	18,000
Estate administration expenses	52,000
Taxes	Nil
Charitable deductions	1,000,000
b. Taxable estate	7,530,000
3. Calculate gift adjusted taxable estate
Plus: Amount of gift in excess of annual deduction	Nil
Less: Estate tax free transfer threshold	5,340,000
c. Gift adjusted taxable estate	Nil
4. Calculate estate tax
Estate tax is 40 percent of gift adjusted taxable estate	2,190,000

Table (3)

Hence, the taxable estate value is $2,190,000.

Conclusion

Thus, the taxable value of M’s estate after his death and after all eligible deductions is $2,190,000.

Summary Introduction

(e)

To determine:

Estate tax liability of M.

Expert Solution

Explanation of Solution

Given,

Value of assess at the time of M’s death is $8,600,000.

Cost of her funeral is $18,000.

Estate administration cost is $52,000.

Amount for charities as per will is $1,000,000.

Taxable value of estate is calculated after making several adjustments to the gross value of estate and it will be,

Particulars	Amount ($)
1. Calculate gross value of estate
a. Value of gross estate	8,600,000
2. Calculate taxable estate
Less:
Funeral expenses	18,000
Estate administration expenses	52,000
Taxes	Nil
Charitable deductions	1,000,000
b. Taxable estate	7,530,000
3. Calculate gift adjusted taxable estate
Plus: Amount of gift in excess of annual deduction	Nil
Less: Estate tax free transfer threshold	5,340,000
c. Gift adjusted taxable estate	2,190,000
4. Calculate estate tax
Estate tax is 40 percent of gift adjusted taxable estate	876,000

Table (4)

Hence, the estate tax is $876,000.

Conclusion

Thus, the estate tax after all eligible deductions is $876,000.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

An annuity provides payments at the end of each two-year period for twenty years. It pays $1,000 at the end of the first period and increases the payment by $1,000 in each subsequent period, so that at the end of the tenth period it pays $10,000. Given a 2% nominal annual interest rate compounded semiannually, determine in which of the following ranges is the present value of this annuity. please use tvm if neededI

A. What is the amount of the annuity purchase required if you wish to receive a fixed payment of $200,000 for 20 years? Assume that the annuity will earn 10 percent per year.B. Calculate the annual cash flows (annuity payments) from a fixed-payment annuity if the present value of the 20-year annuity is $1 million and the annuity earns a guaranteed annual return of 10 percent. The payments are to begin at the end of the current year.C. Calculate the annual cash flows (annuity payments) from a fixed-payment annuity if the present value of the 20-year annuity is $1 million and the annuity earns a guaranteed annual return of 10 percent. The payments are to begin at the end of five years. I need help solving question C on a financial calculator.

John wants to buy a property for $105,000 and wants an 80 percent loan for $84,000. A lenderindicates that a fully amortizing loan can be obtained for 30 years (360 months) at 6 percentinterest; however, a loan fee of $3,500 will also be necessary for John to obtain the loan.a. How much will the lender actually disburse?b. What is the APR for the borrower, assuming that the mortgage is paid off after 30 years (fullterm)?c. If John pays off the loan after five years, what is the effective interest rate? Why is it differ-ent from the effective interest rate in (b)?d. Assume the lender also imposes a prepayment penalty of 2 percent of the outstanding loanbalance if the loan is repaid within eight years of closing. If John repays the loan after fiveyears with the prepayment penalty, what is the effective interest rate?

Answer 2

Question

Chapter 16, Problem 3PA

Summary Introduction

(a)

To determine:

Gross value of M’s estate.

Introduction:

Estate is the sum total of all the money, assets and properties held by a person expressed in monetary terms.

Expert Solution

Explanation of Solution

Given,

Value of assess at the time of M’s death is $8,600,000.

Cost of her funeral is $18,000.

Estate administration cost is $52,000.

Amount for charities as per will is $1,000,000.

Gross value of estate is the total value of all the assets and properties which are left behind after the death of a person.

Hence, the gross value of M’s estate would be $8,600,000.

Conclusion

Thus, the total gross value of M’s estate will be the total value of all the assets left over after her death which is $8,600,000.

Summary Introduction

(b)

To determine:

Taxable value of M’s estate.

Introduction:

Taxable value

is the value of an estate of a person after eligible deductions upon which the tax is charged.

Expert Solution

Explanation of Solution

Given,

Value of assess at the time of M’s death is $8,600,000.

Cost of her funeral is $18,000.

Estate administration cost is $52,000.

Amount for charities as per will is $1,000,000.

Taxable value of estate is calculated after making several adjustments to the gross value of estate and it will be,

Particulars	Amount ($)
13. Calculate gross value of estate
j. Value of gross estate	8,600,000
14. Calculate taxable estate
Less:
Funeral expenses	18,000
Estate administration expenses	52,000
Taxes	Nil
Charitable deductions	1,000,000
k. Taxable estate	7,530,000
15. Calculate gift adjusted taxable estate
Plus: Amount of gift in excess of annual deduction	Nil
Less: Estate tax free transfer threshold	Nil
l. Gift adjusted taxable estate	7,530,000

Table (1)

Hence, the taxable estate value is $7,530,000.

Conclusion

Thus, the taxable value of M’s estate after all eligible deductions is $7,530,000.

Summary Introduction

(c)

To determine:

Gift adjusted taxable value of M’s estate.

Introduction:

Gift

is a present willingly given to someone without receiving any monetary return or consideration against it.

Expert Solution

Explanation of Solution

Given,

Value of assess at the time of M’s death is $8,600,000.

Cost of her funeral is $18,000.

Estate administration cost is $52,000.

Amount for charities as per will is $1,000,000.

Taxable value of gift adjusted taxable estate is calculated after making several adjustments to the gross value of estate and it will be,

Particulars	Amount ($)
1. Calculate gross value of estate
a. Value of gross estate	8,600,000
2. Calculate taxable estate
Less:
Funeral expenses	18,000
Estate administration expenses	52,000
Taxes	Nil
Charitable deductions	1,000,000
b. Taxable estate	7,530,000
3. Calculate gift adjusted taxable estate
Plus: Amount of gift in excess of annual deduction	Nil
Less: Estate tax free transfer threshold	5,340,000
c. Gift adjusted taxable estate	2,190,000

Table (2)

Hence, the taxable estate value is $2,190,000.

Conclusion

Thus, the taxable value of M’s gross gift adjusted estate after all eligible deductions is $2,190,000.

Summary Introduction

(d)

To determine:

Taxable value of M’s estate after his death

Expert Solution

Explanation of Solution

Given,

Value of assess at the time of M’s death is $8,600,000.

Cost of her funeral is $18,000.

Estate administration cost is $52,000.

Amount for charities as per will is $1,000,000.

Taxable value of estate after the death of M is calculated after making several adjustments to the gross value of estate and it will be,

Particulars	Amount ($)
1. Calculate gross value of estate
a. Value of gross estate	8,600,000
2. Calculate taxable estate
Less:
Funeral expenses	18,000
Estate administration expenses	52,000
Taxes	Nil
Charitable deductions	1,000,000
b. Taxable estate	7,530,000
3. Calculate gift adjusted taxable estate
Plus: Amount of gift in excess of annual deduction	Nil
Less: Estate tax free transfer threshold	5,340,000
c. Gift adjusted taxable estate	Nil
4. Calculate estate tax
Estate tax is 40 percent of gift adjusted taxable estate	2,190,000

Table (3)

Hence, the taxable estate value is $2,190,000.

Conclusion

Thus, the taxable value of M’s estate after his death and after all eligible deductions is $2,190,000.

Summary Introduction

(e)

To determine:

Estate tax liability of M.

Expert Solution

Explanation of Solution

Given,

Value of assess at the time of M’s death is $8,600,000.

Cost of her funeral is $18,000.

Estate administration cost is $52,000.

Amount for charities as per will is $1,000,000.

Taxable value of estate is calculated after making several adjustments to the gross value of estate and it will be,

Particulars	Amount ($)
1. Calculate gross value of estate
a. Value of gross estate	8,600,000
2. Calculate taxable estate
Less:
Funeral expenses	18,000
Estate administration expenses	52,000
Taxes	Nil
Charitable deductions	1,000,000
b. Taxable estate	7,530,000
3. Calculate gift adjusted taxable estate
Plus: Amount of gift in excess of annual deduction	Nil
Less: Estate tax free transfer threshold	5,340,000
c. Gift adjusted taxable estate	2,190,000
4. Calculate estate tax
Estate tax is 40 percent of gift adjusted taxable estate	876,000

Table (4)

Hence, the estate tax is $876,000.

Conclusion

Thus, the estate tax after all eligible deductions is $876,000.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 16, Problem 3PA

Summary Introduction

(a)

To determine:

Gross value of M’s estate.

Introduction:

Estate is the sum total of all the money, assets and properties held by a person expressed in monetary terms.

Expert Solution

Explanation of Solution

Given,

Value of assess at the time of M’s death is $8,600,000.

Cost of her funeral is $18,000.

Estate administration cost is $52,000.

Amount for charities as per will is $1,000,000.

Gross value of estate is the total value of all the assets and properties which are left behind after the death of a person.

Hence, the gross value of M’s estate would be $8,600,000.

Conclusion

Thus, the total gross value of M’s estate will be the total value of all the assets left over after her death which is $8,600,000.

Summary Introduction

(b)

To determine:

Taxable value of M’s estate.

Introduction:

Taxable value

is the value of an estate of a person after eligible deductions upon which the tax is charged.

Expert Solution

Explanation of Solution

Given,

Value of assess at the time of M’s death is $8,600,000.

Cost of her funeral is $18,000.

Estate administration cost is $52,000.

Amount for charities as per will is $1,000,000.

Taxable value of estate is calculated after making several adjustments to the gross value of estate and it will be,

Particulars	Amount ($)
13. Calculate gross value of estate
j. Value of gross estate	8,600,000
14. Calculate taxable estate
Less:
Funeral expenses	18,000
Estate administration expenses	52,000
Taxes	Nil
Charitable deductions	1,000,000
k. Taxable estate	7,530,000
15. Calculate gift adjusted taxable estate
Plus: Amount of gift in excess of annual deduction	Nil
Less: Estate tax free transfer threshold	Nil
l. Gift adjusted taxable estate	7,530,000

Table (1)

Hence, the taxable estate value is $7,530,000.

Conclusion

Thus, the taxable value of M’s estate after all eligible deductions is $7,530,000.

Summary Introduction

(c)

To determine:

Gift adjusted taxable value of M’s estate.

Introduction:

Gift

is a present willingly given to someone without receiving any monetary return or consideration against it.

Expert Solution

Explanation of Solution

Given,

Value of assess at the time of M’s death is $8,600,000.

Cost of her funeral is $18,000.

Estate administration cost is $52,000.

Amount for charities as per will is $1,000,000.

Taxable value of gift adjusted taxable estate is calculated after making several adjustments to the gross value of estate and it will be,

Particulars	Amount ($)
1. Calculate gross value of estate
a. Value of gross estate	8,600,000
2. Calculate taxable estate
Less:
Funeral expenses	18,000
Estate administration expenses	52,000
Taxes	Nil
Charitable deductions	1,000,000
b. Taxable estate	7,530,000
3. Calculate gift adjusted taxable estate
Plus: Amount of gift in excess of annual deduction	Nil
Less: Estate tax free transfer threshold	5,340,000
c. Gift adjusted taxable estate	2,190,000

Table (2)

Hence, the taxable estate value is $2,190,000.

Conclusion

Thus, the taxable value of M’s gross gift adjusted estate after all eligible deductions is $2,190,000.

Summary Introduction

(d)

To determine:

Taxable value of M’s estate after his death

Expert Solution

Explanation of Solution

Given,

Value of assess at the time of M’s death is $8,600,000.

Cost of her funeral is $18,000.

Estate administration cost is $52,000.

Amount for charities as per will is $1,000,000.

Taxable value of estate after the death of M is calculated after making several adjustments to the gross value of estate and it will be,

Particulars	Amount ($)
1. Calculate gross value of estate
a. Value of gross estate	8,600,000
2. Calculate taxable estate
Less:
Funeral expenses	18,000
Estate administration expenses	52,000
Taxes	Nil
Charitable deductions	1,000,000
b. Taxable estate	7,530,000
3. Calculate gift adjusted taxable estate
Plus: Amount of gift in excess of annual deduction	Nil
Less: Estate tax free transfer threshold	5,340,000
c. Gift adjusted taxable estate	Nil
4. Calculate estate tax
Estate tax is 40 percent of gift adjusted taxable estate	2,190,000

Table (3)

Hence, the taxable estate value is $2,190,000.

Conclusion

Thus, the taxable value of M’s estate after his death and after all eligible deductions is $2,190,000.

Summary Introduction

(e)

To determine:

Estate tax liability of M.

Expert Solution

Explanation of Solution

Given,

Value of assess at the time of M’s death is $8,600,000.

Cost of her funeral is $18,000.

Estate administration cost is $52,000.

Amount for charities as per will is $1,000,000.

Taxable value of estate is calculated after making several adjustments to the gross value of estate and it will be,

Particulars	Amount ($)
1. Calculate gross value of estate
a. Value of gross estate	8,600,000
2. Calculate taxable estate
Less:
Funeral expenses	18,000
Estate administration expenses	52,000
Taxes	Nil
Charitable deductions	1,000,000
b. Taxable estate	7,530,000
3. Calculate gift adjusted taxable estate
Plus: Amount of gift in excess of annual deduction	Nil
Less: Estate tax free transfer threshold	5,340,000
c. Gift adjusted taxable estate	2,190,000
4. Calculate estate tax
Estate tax is 40 percent of gift adjusted taxable estate	876,000

Table (4)

Hence, the estate tax is $876,000.

Conclusion

Thus, the estate tax after all eligible deductions is $876,000.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 16, Problem 3PA

Summary Introduction

(a)

To determine:

Gross value of M’s estate.

Introduction:

Estate is the sum total of all the money, assets and properties held by a person expressed in monetary terms.

Expert Solution

Explanation of Solution

Given,

Value of assess at the time of M’s death is $8,600,000.

Cost of her funeral is $18,000.

Estate administration cost is $52,000.

Amount for charities as per will is $1,000,000.

Gross value of estate is the total value of all the assets and properties which are left behind after the death of a person.

Hence, the gross value of M’s estate would be $8,600,000.

Conclusion

Thus, the total gross value of M’s estate will be the total value of all the assets left over after her death which is $8,600,000.

Summary Introduction

(b)

To determine:

Taxable value of M’s estate.

Introduction:

Taxable value

is the value of an estate of a person after eligible deductions upon which the tax is charged.

Expert Solution

Explanation of Solution

Given,

Value of assess at the time of M’s death is $8,600,000.

Cost of her funeral is $18,000.

Estate administration cost is $52,000.

Amount for charities as per will is $1,000,000.

Taxable value of estate is calculated after making several adjustments to the gross value of estate and it will be,

Particulars	Amount ($)
13. Calculate gross value of estate
j. Value of gross estate	8,600,000
14. Calculate taxable estate
Less:
Funeral expenses	18,000
Estate administration expenses	52,000
Taxes	Nil
Charitable deductions	1,000,000
k. Taxable estate	7,530,000
15. Calculate gift adjusted taxable estate
Plus: Amount of gift in excess of annual deduction	Nil
Less: Estate tax free transfer threshold	Nil
l. Gift adjusted taxable estate	7,530,000

Table (1)

Hence, the taxable estate value is $7,530,000.

Conclusion

Thus, the taxable value of M’s estate after all eligible deductions is $7,530,000.

Summary Introduction

(c)

To determine:

Gift adjusted taxable value of M’s estate.

Introduction:

Gift

is a present willingly given to someone without receiving any monetary return or consideration against it.

Expert Solution

Explanation of Solution

Given,

Value of assess at the time of M’s death is $8,600,000.

Cost of her funeral is $18,000.

Estate administration cost is $52,000.

Amount for charities as per will is $1,000,000.

Taxable value of gift adjusted taxable estate is calculated after making several adjustments to the gross value of estate and it will be,

Particulars	Amount ($)
1. Calculate gross value of estate
a. Value of gross estate	8,600,000
2. Calculate taxable estate
Less:
Funeral expenses	18,000
Estate administration expenses	52,000
Taxes	Nil
Charitable deductions	1,000,000
b. Taxable estate	7,530,000
3. Calculate gift adjusted taxable estate
Plus: Amount of gift in excess of annual deduction	Nil
Less: Estate tax free transfer threshold	5,340,000
c. Gift adjusted taxable estate	2,190,000

Table (2)

Hence, the taxable estate value is $2,190,000.

Conclusion

Thus, the taxable value of M’s gross gift adjusted estate after all eligible deductions is $2,190,000.

Summary Introduction

(d)

To determine:

Taxable value of M’s estate after his death

Expert Solution

Explanation of Solution

Given,

Value of assess at the time of M’s death is $8,600,000.

Cost of her funeral is $18,000.

Estate administration cost is $52,000.

Amount for charities as per will is $1,000,000.

Taxable value of estate after the death of M is calculated after making several adjustments to the gross value of estate and it will be,

Particulars	Amount ($)
1. Calculate gross value of estate
a. Value of gross estate	8,600,000
2. Calculate taxable estate
Less:
Funeral expenses	18,000
Estate administration expenses	52,000
Taxes	Nil
Charitable deductions	1,000,000
b. Taxable estate	7,530,000
3. Calculate gift adjusted taxable estate
Plus: Amount of gift in excess of annual deduction	Nil
Less: Estate tax free transfer threshold	5,340,000
c. Gift adjusted taxable estate	Nil
4. Calculate estate tax
Estate tax is 40 percent of gift adjusted taxable estate	2,190,000

Table (3)

Hence, the taxable estate value is $2,190,000.

Conclusion

Thus, the taxable value of M’s estate after his death and after all eligible deductions is $2,190,000.

Summary Introduction

(e)

To determine:

Estate tax liability of M.

Expert Solution

Explanation of Solution

Given,

Value of assess at the time of M’s death is $8,600,000.

Cost of her funeral is $18,000.

Estate administration cost is $52,000.

Amount for charities as per will is $1,000,000.

Taxable value of estate is calculated after making several adjustments to the gross value of estate and it will be,

Particulars	Amount ($)
1. Calculate gross value of estate
a. Value of gross estate	8,600,000
2. Calculate taxable estate
Less:
Funeral expenses	18,000
Estate administration expenses	52,000
Taxes	Nil
Charitable deductions	1,000,000
b. Taxable estate	7,530,000
3. Calculate gift adjusted taxable estate
Plus: Amount of gift in excess of annual deduction	Nil
Less: Estate tax free transfer threshold	5,340,000
c. Gift adjusted taxable estate	2,190,000
4. Calculate estate tax
Estate tax is 40 percent of gift adjusted taxable estate	876,000

Table (4)

Hence, the estate tax is $876,000.

Conclusion

Thus, the estate tax after all eligible deductions is $876,000.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 16, Problem 3PA

Summary Introduction

(a)

To determine:

Gross value of M’s estate.

Introduction:

Estate is the sum total of all the money, assets and properties held by a person expressed in monetary terms.

Expert Solution

Explanation of Solution

Given,

Value of assess at the time of M’s death is $8,600,000.

Cost of her funeral is $18,000.

Estate administration cost is $52,000.

Amount for charities as per will is $1,000,000.

Gross value of estate is the total value of all the assets and properties which are left behind after the death of a person.

Hence, the gross value of M’s estate would be $8,600,000.

Conclusion

Thus, the total gross value of M’s estate will be the total value of all the assets left over after her death which is $8,600,000.

Summary Introduction

(b)

To determine:

Taxable value of M’s estate.

Introduction:

Taxable value

is the value of an estate of a person after eligible deductions upon which the tax is charged.

Expert Solution

Explanation of Solution

Given,

Value of assess at the time of M’s death is $8,600,000.

Cost of her funeral is $18,000.

Estate administration cost is $52,000.

Amount for charities as per will is $1,000,000.

Taxable value of estate is calculated after making several adjustments to the gross value of estate and it will be,

Particulars	Amount ($)
13. Calculate gross value of estate
j. Value of gross estate	8,600,000
14. Calculate taxable estate
Less:
Funeral expenses	18,000
Estate administration expenses	52,000
Taxes	Nil
Charitable deductions	1,000,000
k. Taxable estate	7,530,000
15. Calculate gift adjusted taxable estate
Plus: Amount of gift in excess of annual deduction	Nil
Less: Estate tax free transfer threshold	Nil
l. Gift adjusted taxable estate	7,530,000

Table (1)

Hence, the taxable estate value is $7,530,000.

Conclusion

Thus, the taxable value of M’s estate after all eligible deductions is $7,530,000.

Summary Introduction

(c)

To determine:

Gift adjusted taxable value of M’s estate.

Introduction:

Gift

is a present willingly given to someone without receiving any monetary return or consideration against it.

Expert Solution

Explanation of Solution

Given,

Value of assess at the time of M’s death is $8,600,000.

Cost of her funeral is $18,000.

Estate administration cost is $52,000.

Amount for charities as per will is $1,000,000.

Taxable value of gift adjusted taxable estate is calculated after making several adjustments to the gross value of estate and it will be,

Particulars	Amount ($)
1. Calculate gross value of estate
a. Value of gross estate	8,600,000
2. Calculate taxable estate
Less:
Funeral expenses	18,000
Estate administration expenses	52,000
Taxes	Nil
Charitable deductions	1,000,000
b. Taxable estate	7,530,000
3. Calculate gift adjusted taxable estate
Plus: Amount of gift in excess of annual deduction	Nil
Less: Estate tax free transfer threshold	5,340,000
c. Gift adjusted taxable estate	2,190,000

Table (2)

Hence, the taxable estate value is $2,190,000.

Conclusion

Thus, the taxable value of M’s gross gift adjusted estate after all eligible deductions is $2,190,000.

Summary Introduction

(d)

To determine:

Taxable value of M’s estate after his death

Expert Solution

Explanation of Solution

Given,

Value of assess at the time of M’s death is $8,600,000.

Cost of her funeral is $18,000.

Estate administration cost is $52,000.

Amount for charities as per will is $1,000,000.

Taxable value of estate after the death of M is calculated after making several adjustments to the gross value of estate and it will be,

Particulars	Amount ($)
1. Calculate gross value of estate
a. Value of gross estate	8,600,000
2. Calculate taxable estate
Less:
Funeral expenses	18,000
Estate administration expenses	52,000
Taxes	Nil
Charitable deductions	1,000,000
b. Taxable estate	7,530,000
3. Calculate gift adjusted taxable estate
Plus: Amount of gift in excess of annual deduction	Nil
Less: Estate tax free transfer threshold	5,340,000
c. Gift adjusted taxable estate	Nil
4. Calculate estate tax
Estate tax is 40 percent of gift adjusted taxable estate	2,190,000

Table (3)

Hence, the taxable estate value is $2,190,000.

Conclusion

Thus, the taxable value of M’s estate after his death and after all eligible deductions is $2,190,000.

Summary Introduction

(e)

To determine:

Estate tax liability of M.

Expert Solution

Explanation of Solution

Given,

Value of assess at the time of M’s death is $8,600,000.

Cost of her funeral is $18,000.

Estate administration cost is $52,000.

Amount for charities as per will is $1,000,000.

Taxable value of estate is calculated after making several adjustments to the gross value of estate and it will be,

Particulars	Amount ($)
1. Calculate gross value of estate
a. Value of gross estate	8,600,000
2. Calculate taxable estate
Less:
Funeral expenses	18,000
Estate administration expenses	52,000
Taxes	Nil
Charitable deductions	1,000,000
b. Taxable estate	7,530,000
3. Calculate gift adjusted taxable estate
Plus: Amount of gift in excess of annual deduction	Nil
Less: Estate tax free transfer threshold	5,340,000
c. Gift adjusted taxable estate	2,190,000
4. Calculate estate tax
Estate tax is 40 percent of gift adjusted taxable estate	876,000

Table (4)

Hence, the estate tax is $876,000.

Conclusion

Thus, the estate tax after all eligible deductions is $876,000.

Answer 6

Chapter 16, Problem 3PA

Summary Introduction

(a)

To determine:

Gross value of M’s estate.

Introduction:

Estate is the sum total of all the money, assets and properties held by a person expressed in monetary terms.

Expert Solution

Explanation of Solution

Given,

Value of assess at the time of M’s death is $8,600,000.

Cost of her funeral is $18,000.

Estate administration cost is $52,000.

Amount for charities as per will is $1,000,000.

Gross value of estate is the total value of all the assets and properties which are left behind after the death of a person.

Hence, the gross value of M’s estate would be $8,600,000.

Conclusion

Thus, the total gross value of M’s estate will be the total value of all the assets left over after her death which is $8,600,000.

Answer 7

Chapter 16, Problem 3PA

Summary Introduction

(a)

To determine:

Gross value of M’s estate.

Introduction:

Estate is the sum total of all the money, assets and properties held by a person expressed in monetary terms.

Answer 8

Expert Solution

Explanation of Solution

Given,

Value of assess at the time of M’s death is $8,600,000.

Cost of her funeral is $18,000.

Estate administration cost is $52,000.

Amount for charities as per will is $1,000,000.

Gross value of estate is the total value of all the assets and properties which are left behind after the death of a person.

Hence, the gross value of M’s estate would be $8,600,000.

Answer 9

Expert Solution

Answer 10

Expert Solution

Answer 11

Expert Solution

Answer 12

Conclusion

Thus, the total gross value of M’s estate will be the total value of all the assets left over after her death which is $8,600,000.

Answer 13

Summary Introduction

(b)

To determine:

Taxable value of M’s estate.

Introduction:

Taxable value

is the value of an estate of a person after eligible deductions upon which the tax is charged.

Expert Solution

Explanation of Solution

Given,

Value of assess at the time of M’s death is $8,600,000.

Cost of her funeral is $18,000.

Estate administration cost is $52,000.

Amount for charities as per will is $1,000,000.

Taxable value of estate is calculated after making several adjustments to the gross value of estate and it will be,

Particulars	Amount ($)
13. Calculate gross value of estate
j. Value of gross estate	8,600,000
14. Calculate taxable estate
Less:
Funeral expenses	18,000
Estate administration expenses	52,000
Taxes	Nil
Charitable deductions	1,000,000
k. Taxable estate	7,530,000
15. Calculate gift adjusted taxable estate
Plus: Amount of gift in excess of annual deduction	Nil
Less: Estate tax free transfer threshold	Nil
l. Gift adjusted taxable estate	7,530,000

Table (1)

Hence, the taxable estate value is $7,530,000.

Conclusion

Thus, the taxable value of M’s estate after all eligible deductions is $7,530,000.

Answer 14

Summary Introduction

(b)

To determine:

Taxable value of M’s estate.

Introduction:

Taxable value

is the value of an estate of a person after eligible deductions upon which the tax is charged.

Answer 15

Expert Solution

Explanation of Solution

Given,

Value of assess at the time of M’s death is $8,600,000.

Cost of her funeral is $18,000.

Estate administration cost is $52,000.

Amount for charities as per will is $1,000,000.

Taxable value of estate is calculated after making several adjustments to the gross value of estate and it will be,

Particulars	Amount ($)
13. Calculate gross value of estate
j. Value of gross estate	8,600,000
14. Calculate taxable estate
Less:
Funeral expenses	18,000
Estate administration expenses	52,000
Taxes	Nil
Charitable deductions	1,000,000
k. Taxable estate	7,530,000
15. Calculate gift adjusted taxable estate
Plus: Amount of gift in excess of annual deduction	Nil
Less: Estate tax free transfer threshold	Nil
l. Gift adjusted taxable estate	7,530,000

Table (1)

Hence, the taxable estate value is $7,530,000.

Answer 16

Expert Solution

Answer 17

Expert Solution

Answer 18

Expert Solution

Answer 19

Conclusion

Thus, the taxable value of M’s estate after all eligible deductions is $7,530,000.

Answer 20

Summary Introduction

(c)

To determine:

Gift adjusted taxable value of M’s estate.

Introduction:

Gift

is a present willingly given to someone without receiving any monetary return or consideration against it.

Expert Solution

Explanation of Solution

Given,

Value of assess at the time of M’s death is $8,600,000.

Cost of her funeral is $18,000.

Estate administration cost is $52,000.

Amount for charities as per will is $1,000,000.

Taxable value of gift adjusted taxable estate is calculated after making several adjustments to the gross value of estate and it will be,

Particulars	Amount ($)
1. Calculate gross value of estate
a. Value of gross estate	8,600,000
2. Calculate taxable estate
Less:
Funeral expenses	18,000
Estate administration expenses	52,000
Taxes	Nil
Charitable deductions	1,000,000
b. Taxable estate	7,530,000
3. Calculate gift adjusted taxable estate
Plus: Amount of gift in excess of annual deduction	Nil
Less: Estate tax free transfer threshold	5,340,000
c. Gift adjusted taxable estate	2,190,000

Table (2)

Hence, the taxable estate value is $2,190,000.

Conclusion

Thus, the taxable value of M’s gross gift adjusted estate after all eligible deductions is $2,190,000.

Answer 21

Summary Introduction

(c)

To determine:

Gift adjusted taxable value of M’s estate.

Introduction:

Gift

is a present willingly given to someone without receiving any monetary return or consideration against it.

Answer 22

Expert Solution

Explanation of Solution

Given,

Value of assess at the time of M’s death is $8,600,000.

Cost of her funeral is $18,000.

Estate administration cost is $52,000.

Amount for charities as per will is $1,000,000.

Taxable value of gift adjusted taxable estate is calculated after making several adjustments to the gross value of estate and it will be,

Particulars	Amount ($)
1. Calculate gross value of estate
a. Value of gross estate	8,600,000
2. Calculate taxable estate
Less:
Funeral expenses	18,000
Estate administration expenses	52,000
Taxes	Nil
Charitable deductions	1,000,000
b. Taxable estate	7,530,000
3. Calculate gift adjusted taxable estate
Plus: Amount of gift in excess of annual deduction	Nil
Less: Estate tax free transfer threshold	5,340,000
c. Gift adjusted taxable estate	2,190,000

Table (2)

Hence, the taxable estate value is $2,190,000.

Answer 23

Expert Solution

Answer 24

Expert Solution

Answer 25

Expert Solution

Answer 26

Conclusion

Thus, the taxable value of M’s gross gift adjusted estate after all eligible deductions is $2,190,000.

Answer 27

Summary Introduction

(d)

To determine:

Taxable value of M’s estate after his death

Expert Solution

Explanation of Solution

Given,

Value of assess at the time of M’s death is $8,600,000.

Cost of her funeral is $18,000.

Estate administration cost is $52,000.

Amount for charities as per will is $1,000,000.

Taxable value of estate after the death of M is calculated after making several adjustments to the gross value of estate and it will be,

Particulars	Amount ($)
1. Calculate gross value of estate
a. Value of gross estate	8,600,000
2. Calculate taxable estate
Less:
Funeral expenses	18,000
Estate administration expenses	52,000
Taxes	Nil
Charitable deductions	1,000,000
b. Taxable estate	7,530,000
3. Calculate gift adjusted taxable estate
Plus: Amount of gift in excess of annual deduction	Nil
Less: Estate tax free transfer threshold	5,340,000
c. Gift adjusted taxable estate	Nil
4. Calculate estate tax
Estate tax is 40 percent of gift adjusted taxable estate	2,190,000

Table (3)

Hence, the taxable estate value is $2,190,000.

Conclusion

Thus, the taxable value of M’s estate after his death and after all eligible deductions is $2,190,000.

Answer 28

Summary Introduction

(d)

To determine:

Taxable value of M’s estate after his death

Answer 29

Expert Solution

Explanation of Solution

Given,

Value of assess at the time of M’s death is $8,600,000.

Cost of her funeral is $18,000.

Estate administration cost is $52,000.

Amount for charities as per will is $1,000,000.

Taxable value of estate after the death of M is calculated after making several adjustments to the gross value of estate and it will be,

Particulars	Amount ($)
1. Calculate gross value of estate
a. Value of gross estate	8,600,000
2. Calculate taxable estate
Less:
Funeral expenses	18,000
Estate administration expenses	52,000
Taxes	Nil
Charitable deductions	1,000,000
b. Taxable estate	7,530,000
3. Calculate gift adjusted taxable estate
Plus: Amount of gift in excess of annual deduction	Nil
Less: Estate tax free transfer threshold	5,340,000
c. Gift adjusted taxable estate	Nil
4. Calculate estate tax
Estate tax is 40 percent of gift adjusted taxable estate	2,190,000

Table (3)

Hence, the taxable estate value is $2,190,000.

Answer 30

Expert Solution

Answer 31

Expert Solution

Answer 32

Expert Solution

Answer 33

Conclusion

Thus, the taxable value of M’s estate after his death and after all eligible deductions is $2,190,000.

Answer 34

Summary Introduction

(e)

To determine:

Estate tax liability of M.

Expert Solution

Explanation of Solution

Given,

Value of assess at the time of M’s death is $8,600,000.

Cost of her funeral is $18,000.

Estate administration cost is $52,000.

Amount for charities as per will is $1,000,000.

Taxable value of estate is calculated after making several adjustments to the gross value of estate and it will be,

Particulars	Amount ($)
1. Calculate gross value of estate
a. Value of gross estate	8,600,000
2. Calculate taxable estate
Less:
Funeral expenses	18,000
Estate administration expenses	52,000
Taxes	Nil
Charitable deductions	1,000,000
b. Taxable estate	7,530,000
3. Calculate gift adjusted taxable estate
Plus: Amount of gift in excess of annual deduction	Nil
Less: Estate tax free transfer threshold	5,340,000
c. Gift adjusted taxable estate	2,190,000
4. Calculate estate tax
Estate tax is 40 percent of gift adjusted taxable estate	876,000

Table (4)

Hence, the estate tax is $876,000.

Conclusion

Thus, the estate tax after all eligible deductions is $876,000.

Answer 35

Summary Introduction

(e)

To determine:

Estate tax liability of M.

Answer 36

Expert Solution

Explanation of Solution

Given,

Value of assess at the time of M’s death is $8,600,000.

Cost of her funeral is $18,000.

Estate administration cost is $52,000.

Amount for charities as per will is $1,000,000.

Taxable value of estate is calculated after making several adjustments to the gross value of estate and it will be,

Particulars	Amount ($)
1. Calculate gross value of estate
a. Value of gross estate	8,600,000
2. Calculate taxable estate
Less:
Funeral expenses	18,000
Estate administration expenses	52,000
Taxes	Nil
Charitable deductions	1,000,000
b. Taxable estate	7,530,000
3. Calculate gift adjusted taxable estate
Plus: Amount of gift in excess of annual deduction	Nil
Less: Estate tax free transfer threshold	5,340,000
c. Gift adjusted taxable estate	2,190,000
4. Calculate estate tax
Estate tax is 40 percent of gift adjusted taxable estate	876,000

Table (4)

Hence, the estate tax is $876,000.

Answer 37

Expert Solution

Answer 38

Expert Solution

Answer 39

Expert Solution

Answer 40

Conclusion

Thus, the estate tax after all eligible deductions is $876,000.

Answer 41

Ch. 16 - Prob. 1PA Ch. 16 - Prob. 2PA Ch. 16 - Prob. 3PA Ch. 16 - Prob. 4PA Ch. 16 - Prob. 5PA Ch. 16 - Prob. 6PA Ch. 16 - Prob. 1DC1 Ch. 16 - Prob. 2DC1 Ch. 16 - Prob. 3DC1 Ch. 16 - Prob. 4DC1

(a) To determine: Gross value of M’s estate. Introduction: Estate is the sum total of all the money, assets and properties held by a person expressed in monetary terms.

Concept explainers

(a)

To determine:

Gross value of M’s estate.

Introduction:

Estate is the sum total of all the money, assets and properties held by a person expressed in monetary terms.

Explanation of Solution

(b)

To determine:

Taxable value of M’s estate.

Introduction:

Taxable value

is the value of an estate of a person after eligible deductions upon which the tax is charged.

Explanation of Solution

(c)

To determine:

Gift adjusted taxable value of M’s estate.

Introduction:

Gift

is a present willingly given to someone without receiving any monetary return or consideration against it.

Explanation of Solution

(d)

To determine:

Taxable value of M’s estate after his death

Explanation of Solution

(e)

To determine:

Estate tax liability of M.

Explanation of Solution

Want to see more full solutions like this?

Chapter 16 Solutions

(a) To determine: Gross value of M’s estate. Introduction: Estate is the sum total of all the money, assets and properties held by a person expressed in monetary terms.

Concept explainers

(a) To determine: Gross value of M’s estate. Introduction: Estate is the sum total of all the money, assets and properties held by a person expressed in monetary terms.

Explanation of Solution

(b) To determine: Taxable value of M’s estate. Introduction: Taxable value is the value of an estate of a person after eligible deductions upon which the tax is charged.

Explanation of Solution

(c) To determine: Gift adjusted taxable value of M’s estate. Introduction: Gift is a present willingly given to someone without receiving any monetary return or consideration against it.

Explanation of Solution

(d) To determine: Taxable value of M’s estate after his death

Explanation of Solution

(e) To determine: Estate tax liability of M.

Explanation of Solution

Want to see more full solutions like this?

Chapter 16 Solutions

(a)

To determine:

Gross value of M’s estate.

Introduction:

Estate is the sum total of all the money, assets and properties held by a person expressed in monetary terms.

(b)

To determine:

Taxable value of M’s estate.

Introduction:

Taxable value

is the value of an estate of a person after eligible deductions upon which the tax is charged.

(c)

To determine:

Gift adjusted taxable value of M’s estate.

Introduction:

Gift

is a present willingly given to someone without receiving any monetary return or consideration against it.

(d)

To determine:

Taxable value of M’s estate after his death

(e)

To determine:

Estate tax liability of M.