Question

Ghoulardi died in 2019. Her gross estate was worth $20,000,000. $5,000,000 went directly to her husband. $500,000 went to her church. Her funeral and all properly deductible liabilities of the estate totaled $100,000. Her post-1976 cumulative taxable gifts totaled $800,000; the related estate and gift tax deemed paid on cumulative gifts was $50,000. No estate taxes were paid at the state level.

a. Calculate her final estate tax liability.

b. How much income does her husband report in his personal tax return [Form 1040] from the bequest to him?

Answer 1

Estate		Amt in
Gross value of Estate		2,00,00,000
Less:Amount to husband		50,00,000
Amount to church		5,00,000
Funeral & other deductible		1,00,000
Post 1976 Cumulative taxabe gifts		8,00,000
Net Estate Value		1,44,00,000
Less:Basic exemption limit for 2019		1,14,00,000
Taxable Estate		30,00,000
Estate Tax on $1,000,000		3,45,800
Add:40% on amount above $1,000,000		8,00,000
Total Estate Tax		11,45,800
Tax on $800,000 @248.300 up to $750,000 & 39% on balance		2,67,800
Less:Exemption available		47,000
Net Tax payable		2,20,800
Less:gift tax assumed paid		50,000
Net Gift Tax		1,70,800
Total Estate tax		13,16,600