EXHIBIT $25-2$ The Exemption Equivalent $/$ Applicable Exclusion Amount

$*$The estate tax was optional for decedents dying in $2010.$ In lieu of the estate tax, executors could opt to have the adjusted tax basis of the assets in the gross estate carry over to the heirs of the decedent. The

applicable credit and exemption are zero for taxpayers who opt out of the estate tax in $2010.$ EXHIBIT $25-1$ Unified Transfer Tax Rates$*$

$\backslash$table$[[$Tax Base Equal to or Over,Not Over,Tentative Tax,Plus,of Amount Over$],[$$$0,$$$10,000,$$$,0,18\%,$$$],[10,000,20,000,1,800,20,10,000],[20,000,40,000,3,800,22,20,000],[40,000,60,000,8,200,24,40,000],[60,000,80,000,13,000,26,60,000],[80,000,100,000,18,200,28,80,000],[100,000,150,000,23,800,30,100,000],[150,000,250,000,38,800,32,150,000],[250,000,500,000,70,800,34,250,000],[500,000,750,000,155,800,37,500,000],[750,000,1,000,000,248,300,39,750,000],[1,000,000,,345,800,40,1,000,000]]$Diego is a single individual who owns a life insurance policy worth $$2\mathrm{.}538$ million that will be worth $$8$ million upon his death. This year

Diego transferred the policy and all incidents of ownership to an irrevocable trust that pays income annually to Diego's two children for

$15$ years and then distributes the corpus to the children in equal shares. Assume that Diego has made only one prior taxable gift of $$15$

million in January of $2018.($Refer to Exhibit $25-1$ and Exhibit $25-2.)$

Required:

a$.$ Calculate the amount of gift tax due $($if any$)$ on the transfer of the insurance policy.

b$.$ Diego died unexpectedly this year after transferring the policy. At the time of death, Diego's probate estate was $$25$ million, to be

divided in equal shares between Diego's two children. Calculate the amount of cumulative taxable transfers for estate tax purposes.

Note: For all requirements, enter your answers in dollars and not in millions of dollars.