Assume the same facts as in Problem 13-48 and that before Yuji’s death in 2015 his wife already owned property valued at $300,000. Assume that each asset owned by each spouse increased 8% in value by the surviving spouse’s date of death later in 2015 and that Yuji’s executor elected to claim the maximum marital deduction possible. Assume there were no state death taxes. From a tax standpoint, was the executor’s strategy of electing the marital deduction on the QTIP trust a wise decision? Support your answer with computations.
In problem
When Yuji died in March 2015, his gross estate was valued at $8 million. He owed debts totaling $300,000. Funeral and administration expenses were $12,000 and $120,000, respectively. The marginal estate tax rate exceeded his estate’s marginal income tax rate. Yuji willed his church $300,000 and his spouse $1.1 million. Calculate Yuji’s taxable estate.