Question

Early in 2011, Nancy Fable was diagnosed with a terminal illness, and doctors gave her one more year to live. Aside from a 2010 $1,000,000 gift to the University of Georgia, she had not done any other gifting prior to 2011. She made the following gifts during 2011:
Gift to the First Baptist Church . . . . .. . .. .. .. . . . . . .. . . . . .. .... . .. . . .... $ 50,000
Gift to the Red Cross ................................................................................. 25,000
Gift to Medcap Manufacturing Co. for a new fitness center . .. . . . . . .. .. 100,000
Payment to Princeton University for her only nephew’s tuition . . . . . .. . 30,000
Gift to her only sister . . . .. . . .. .. .. ... .. . . .. .. . . . . . .. .. .. ... . . . . .. . . .. 70,000
Gifts to each of her three nieces. . . .. . .. .... .. . . . . . .. . . . . .. .. ... .. . . .. . 45,000
$320,000
Early in 2012, she made gifts of $25,000 each to her sister, three nieces, and a nephew. In the spring of 2012, Nancy passed away, leaving an estate consisting of the following at her date of death:
a. One thousand shares of Google stock valued at $900 per share.
b. Real estate in Macon County, Georgia, valued at $3,250,000.
c. Household effects valued at $21,000.
d. Bank accounts totaling $780,000 and gold coins valued at $310,000.
e. Loan against the Macon County real estate consisting of $300,000 plus accrued interest of $7,200.
Funeral and other estate administrative expenses totaled $45,000. Property taxes of $4,000 on the real estate and income taxes of $27,000 were paid by the personal representative. In addition to the above insurance policy, Medcap Manufacturing owned an insurance policy on Nancy’s life that had a death benefit of $150,000.
Subsequent to Nancy’s death, but within the 6-month alternative valuation date, the following occurred:
a. Two months after Nancy’s death, the Macon County land was sold for $3,050,000,andthe principal amount of the real estate loan was paid off along with revised accrued interest of $8,300.
b. Three months after Nancy’s death, the gold market began to collapse, and the coins were sold for $250,000.
c. ExxonMobil stock was discovered. The stock had a value of $22,000 at Nancy’s date of death and was subsequently sold for $23,000.
d. The bubble burst and four months after Nancy’s death, the Google stock was sold for $780 per share.
e. The household effects were distributed to family and friends and are excluded from estate assets.
f. All remaining cash, including $21,000 of interest since Nancy’s date of death, was distributed as follows: one-third to immediate family and the balance to the University of Georgia to endow a chaired professorship in the Theatre Department.
Required
Determine the total amount to be paid for both estate and gift taxes over the 3-year period of 2010 through 2012 by year.


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  • CreatedApril 13, 2015
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