Question

​Morgan, a​ widow, recently passed away. The value of her assets at the time of death was ​$10,047,000. The cost of her funeral was ​$12,216​, while estate administrative costs totaled ​$33,862. As stipulated in her​ will, she left ​$978,700 to charities. Based on this information answer the following​ questions: a. Determine the value of​ Morgan's gross estate. b. Calculate the value of her taxable estate. c. What is her​ gift-adjusted taxable estate​ value? d. Assuming she died in 2017​, how much of her estate would be subject to​ taxation? e. Calculate the estate tax liability.

Answer 1

a. Gross Estate = $10,047,000

b. Gross Estate $10,047,000

Less: Funeral expenses $12,216

Admin Expenses $33,862

Adjusted gross estate $10,000,922

Less: Marital deduction $0

Charitable deduction $978,700

Taxable Estate $9,022,222

c. Taxable estate $9,022,222

Adjusted taxable gifts $0

Gift adjusted taxable $9,022,222

estate

d. Estate subject to taxation = $9,022,222

e. Estate Tax liability = ($9,022,222 - $5,340,000) * 40%

= $3,682,222 * 40%

= $1,472,888.80