Use Worksheet 15.2. When Jacob Kohler died unmarried in 2015, he left an estate valued at $8,150,000. His trust directed distribution as follows: $20,000 to the local hospital, $170,000 to his alma mater, and the remainder to his three adult children. Death-related costs and expenses were $15,100 for funeral expenses, $30,000 paid to attorneys, $3,000 paid to accountants, and $20,000 paid to the trustee of his living trust. In addition, there were debts of $135,000. Use Worksheet 15.2 and Exhibit 15.7 and Exhibit 15.8 to calculate the federal estate tax due on his estate. Round your answer to nearest whole dollar.

On December 17, 2010, the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 was signed into law. The major features of the transfer tax provisions were to reinstate the transfer tax on estates, change the applicable exclusion amount for both gift transfers and estate transfers, and add the portability of the unified transfer tax credit. This table shows the recent history of the applicable exclusion amounts Unified Tax Credit-Estates $780,800 $780,800 $780,800 $1,455,800 Estate tax repealed for 2010 $1,730,800 $1,772,800 $2,045,800 $2,081,800 $2.117.800 Unified Tax Credit-Gifts $345,800 $345,800 $345,800 $345,800 $330,800 $1,730,800 $1,772,800 $2,045,800 $2,081,800 $2.117.800 Applicable Exclusion Applicable Exclusion Year AmountEstates $2,000,000 $2,000,000 $2,000,000 $3,500,000 AmountGifts $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $5,000,000 $5,120,000 $5,250,000 $5,340,000 $5.430.000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 $5,000,000 $5,120,000 $5,250,000 $5,340,000 $5.430.000 This unified rate schedule defines the amount of federal gift and estate taxes that estates of various sizes would have to pay. It incorporates the rates passed in the American Taxpayer Relief Act of 2012, signed into law in 2013. Estates and gifts under the exclusion amount pay no federal tax. The estate exclusion amount increased annually from $2,000,000 in 2006 to $5,430,000 in 2015 (see Exhibit 15.8). From 2009 to 2015, the top tax rates decreased from 45% to 40% TAXABLE ESTATE VALUE TENTATIVE TAX More Than But Not More Than Base Amount +Percent 18% 20% 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 1,800 3,800 8,200 13,000 18,200 23,800 38,800 70,800 155,800 248,300 345,800 10,000 20,000 40,000 60,000 80,000 100,000 150,000 250,000 500,000 750,000 1,000,000 $ 10,000 20,000 40,000 60,000 80,000 100,000 150,000 250,000 500,000 750,000 1,000,000 24 26 28 30 32 34 37 39 40 On December 17, 2010, the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 was signed into law. The major features of the transfer tax provisions were to reinstate the transfer tax on estates, change the applicable exclusion amount for both gift transfers and estate transfers, and add the portability of the unified transfer tax credit. This table shows the recent history of the applicable exclusion amounts Unified Tax Credit-Estates $780,800 $780,800 $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 Unified Tax Credit-Gifts $345,800 $345,800 $345,800 $345,800 $330,800 $1,730,800 $1,772,800 $2,045,800 $2,081,800 $2.117.800 Applicable Exclusion Applicable Exclusion Year AmountEstates $2,000,000 $2,000,000 $2,000,000 $3,500,000 AmountGifts $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $5,000,000 $5,120,000 $5,250,000 $5,340,000 $5.430.000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 $5,000,000 $5,120,000 $5,250,000 $5,340,000 $5.430.000 This unified rate schedule defines the amount of federal gift and estate taxes that estates of various sizes would have to pay. It incorporates the rates passed in the American Taxpayer Relief Act of 2012, signed into law in 2013. Estates and gifts under the exclusion amount pay no federal tax. The estate exclusion amount increased annually from $2,000,000 in 2006 to $5,430,000 in 2015 (see Exhibit 15.8). From 2009 to 2015, the top tax rates decreased from 45% to 40% TAXABLE ESTATE VALUE TENTATIVE TAX More Than But Not More Than Base Amount +Percent 18% 20% 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 1,800 3,800 8,200 13,000 18,200 23,800 38,800 70,800 155,800 248,300 345,800 10,000 20,000 40,000 60,000 80,000 100,000 150,000 250,000 500,000 750,000 1,000,000 $ 10,000 20,000 40,000 60,000 80,000 100,000 150,000 250,000 500,000 750,000 1,000,000 24 26 28 30 32 34 37 39 40