Module $7$ Tax Problems$-$ Tax Problems: Chapter $13$ C$13$: $13-57$

Bonnie died on June $1,2022,$ survived by her husband, Abner, and two sons, Carl and

Doug. Bonnie$$s only lifetime taxable gift was made in October $2020$ in the taxable amount

of $$13\mathrm{.}25$ million. She did not elect gift splitting. By the time of her death, the value of the

gifted property $($stock$)$ had declined to $$5\mathrm{.}1$ million.

Bonnie$$s executor discovered the items shown below. Amounts shown are the FMVs of

the items as of June $1,2022.$

Cash in checking account in her name $ $199,750$

Cash in savings account in her name $430,000$

Stock in names of Bonnie and Doug, joint tenants with right of

survivorship. Bonnie provided all the consideration $($$$3,000)$ to

purchase the stock. $25,000$

Land in names of Bonnie and Abner, joint tenants with right of

survivorship. Abner provided all the consideration to purchase the

land. $360,000$

Personal residence in only Bonnie$$s name $450,000$

Life insurance on Bonnie$$s life. Bonnie was owner, and Bonnie$$s estate

was beneficiary $($face value$)5,000,000$

Trust created under the will of Bonnie$$s mother $($who died in $2000).$

Bonnie was entitled to all the trust income for life, and she could will the trust property to whomever she desired. She willed it to her sons in equal amounts. $9,000,000.$ Bonnie$$s debts, as of her date of death, were $$60,000.$ Her funeral and administration expenses were $$9,000$ and $$71,000,$ respectively. Her estate paid state death taxes of $$65,000.$

The executor elected to deduct the administration expenses on the estate tax return.

Bonnie$$s will included the following:

I leave my residence to my husband Abner.

$$250,000$ of property is to be transferred to a trust with First Bank named as trustee. All of the

income is to be paid to my husband, Abner, semiannually for the rest of his life. Upon his death the property is to be divided equally between my two sons or their estates.

I leave $$47,000$ to the American Cancer Society.

Assume the executor elected to claim the maximum marital deduction possible. Compute

the following with respect to Bonnie$$s estate:

a$.$ Gross estate

b$.$ Taxable estate

c$.$ Adjusted taxable gifts

d$.$ Estate tax base and basic exclusion amount portable to Abner

e$.$ Tentative tax on estate tax base

f$.$ Federal estate tax payable