Question

The date of death for a widow was 2019. If the estate was valued at $2,186,000 and the estate was taxed at 40 percent, what was the heir's tax liability? Use Exhibit 19-6 for Estate Exemption.

Answer 1

Value of tax liability will be zero

Explanation:

Given:

Total estate value = $2,186,000

Estate tax = 40 %

Find:

Heir's tax liability = ?

Computation:

Total taxable estate = Total estate value - Estate Exemption

Note: According to Exhibit 19-6 for Estate Exemption, Estate Exemption is 11.4 million.

We know that Estate Exemption is higher than total estate value, therefore will be no tax liability on the successor, so the value of tax liability will be zero.