When Shen Wong died in 2012, he left an estate valued at $20,000,000. His trust directed distribution as follows: $200,000 in charitable deductions ($75,000 to the local hospital plus $125,000 to his alma mater), and the remainder to his four adult children, Death-related costs were $7,500 for funeral expenses, and $100,000 in administrative expenses ($50,000 paid to attorneys, $10,000 paid to accountants, and $40,000 paid to the trustee of his living trust. In addition, there were debts of $450,000. Use the following dropdown menus to obtain the relevant tax schedules and credits: Exhibits - Tax schedules and credits Exhibit 157-Unified Credits and Applicable Exclusion Amounts for Estates and Gifts Exhibit 15.8-Federal Unified Transfer Tax Rates Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Unified Tax Credit- Estates $780,800 $1,455,800 Estate tax repealed for 2010 $1,730,800 $1,772,800 $2,045,800 $2,081,800 $2,117,800 $2,125,800 $2,141,800 $4,417,800 Source: Internal Revenue Service Applicable Exclusion Amount- Estates $2,000,000 $3,500,000 $5,000,000 $5,120,000 $5,250,000 $5,340,000 $5,430,000 $5,340,000 $5,490,000 $11,180,000 Unified Tax Credit Applicable Exclusion Amount -Gifts Gifts $345,800 $345,800 $330,800 $1,730,800 $1,772,800 $2,045,800 $2,081,800 $2,117,800 $2,125,800 $2,141,800 $4,417,800 $1,000,000 $1,000,000 $1,000,000 $5,000,000 $5,120,000 $5,250,000 $5,340,000 $5,430,000 $5,340,000 $5,490,000 $11,180,000 Assignment: Chapter 15 Preserving Your Estate Use the following worksheet to calculate the federal estate tax due on Shen Wong s estate. (Hint: Enter a value of $0 for any line that does not apply. Use Exhibit 15.7 to calculate the tentative tax. Use Exhibit 15.8 to determine the appropriate unified tax credit.) Computing Federal Estate Tax Due Name: Shen Wong Line Computation 1 2 3 4 5 6 7 8 10 11 12 Subtract sum of: Result: Subtract sum of: Result: Add: Result: Compute: Subtract sum of: Result: Subtract: Result: Item Gross estate (a) Funeral expenses (b) Administrative expenses (c) Debts (d) Other expenses Total: Adjusted gross estate (a) Marital deduction (b) Charitable deduction Total: Taxable estate Adjusted taxable gifts (post-1976) Estate tax base Tentative tax on estate tax base (a) Gift tax payable on post-1976 gifts (b) Unified tax credit Total: Total estate taxes Other credits Federal estate tax due Date: 11/30/2012 Amount $ $0.00 $0.00 $0.00 S Total Amount s $ $0.00 $ S $ ($0.00) S Grade It Now Save & Continue Continue without smin Assignment: Chapter 15 Preserving Your Estate Exhibit 15.7 - Taxable Estate Value Unified Credits and Applicable Exclusion Amounts for Estates and Gifts: Exhibit 15.8-Federal Unified Transf More Than But Not More Than $0 10,000 10,000 20,000 20,000 40,000 40,000 60,000 60,000 80,000 80,000 100,000 100,000 150,000 150,000 250,000 250,000 500,000 500,000 750,000 750,000 1,000,000 1,000,000 Exhibits Tax schedules and credits Source: Internal Revenue Code, Section 2001. - Base Amount $0 1,800 3,800 8,200 13,000 18,200 23,800 38,800 70,800 155,800 248,300 345,800 Tentative Tax + Percent 20% 22% 24% 26% 28% 30% 32% 34% 37% 39 40 On Excess Over $10,000 20,000 40,000 60,000 80,000 100,000 150,000 250,000 500,000 750,000 1,000,000