Charles Kamp, a divorced person, died in February of the current year with an estate consisting of assets valued at $7,008,000 and liabilities of $380,000. Charles’s will contain the following provisions:
a. Robert Sullivan would serve as executor of the estate and trustee for the Kamp Children Trust.
b. Timberland with a market value of $560,000 would be placed in a charitable remainder trust. The income from the trust would accrue to the benefit of his sister Marsha Kamp Rodriquez. Income would be reduced by the depletion charge associated with the number of board feet of lumber harvested.
c. Securities with a value of $25,000 would be given to the Milwaukee Art Museum, recognized as a charitable organization.
d. Securities with a value of $600,000 would be given to his married daughter, Maria Kamp Wilson.
e. Each of his three best hunting friends would be paid $180,000 from the proceeds of the sale of Charles’s investment in hunting land in Alaska. The hunting land was valued at $475,000 and subsequently sold for $480,000.
f. His long-time friend Ernest Kampmeyer would be given $3,940,000.
g. Proceeds from the life insurance policy with a death benefit of $1,200,000 would be placed in a trust for the benefit of Charles’s two minor children.
Administrative and funeral expenses associated with Charles’s estate totaled $30,000. Charles’s income tax returns for the year of death reported unpaid federal and state income taxes of $13,000.
Required
1. Assuming the unified transfer tax rates and unified credit as set forth in the text, determine the amount of estate tax due on Charles Kamp’s estate.
2. Prepare a schedule showing the amounts and recipients of general legacies.