Mr. JS died on June 19 when the total FMV of his property was $13 million and his debts totaled $789,000. His executor paid $13,000 funeral expenses and $82,600 accounting and legal fees to settle the estate. Mr. JS bequeathed $500,000 to the First Lutheran Church of Milwaukee and $1 million to Western Wisconsin College. He bequeathed his art collection (FMV $2.4 million) to his wife and the residual of his estate to his three children.
a. Compute Mr. JS’s taxable estate.
b. Compute the estate tax payable by Mr. JS’s executor assuming that Mr. JS made no taxable gifts during his lifetime.
c. Compute the estate tax payable by Mr. JS’s executor assuming that Mr. JS made a $1,500,000 taxable gift in 2011, but paid no gift tax because of his lifetime transfer tax exclusion.