Jill, a widow, died on December 15, 2015. At her death Jill owned many assets with the following FMV at DOD (fair market value at time of death):
savings account $2,250,000
checking account $3,000
California tax exempt municipal bonds $100,000
1,000 shares of Cisco stock [the high and low for the Cisco share on DOD (date of death) was $19 and $21]
auto (the Blue Book value at DOD was $7,000 but the executor of the estate was only able to sell it in February 2016 for $6,000)
residence $3,500,000, which is subject to a mortgage of $300,000
joint and survivor checking account with her son John in which she contributed all the funds $30,000
personal and household goods $15,000
Jill was a beneficiary of a testamentary trust created under the will of her late uncle George, pursuant to which she was entitled to income for life from the trust payable at least annually and over which she had a power to appoint the entire trust assets in favor of anyone. The value of the trust corpus at Jill’s DOD equals $1,000,000
In June of 1999 Jill created an irrevocable trust with $500,000. She was the income beneficiary for 10 years and the remainder man was her nephew Jimmy. The value of the trust at Jill’s DOD was $4,500,000 (Use Table B Term Certain for assumed 6% rate in June of 1999…(actual was 6.4%))
Jill was the income beneficiary for her life of a trust created by her Uncle Tom. The remainderman was her nephew Jimmy. The value of the trust $200,000
Jill transferred her $500,000 term life insurance on her life into an irrevocable insurance trust in June of 2014.
Jill owned whole life $300,000 insurance policy on the life of her son John. At the time of her death the surrender value is $20,000.
Jill owned annuities for her life. During her lifetime she received $12,000 per year.
funeral and administrative expenses $25,000
her will provides that all her estate is to pass to John.
a. Calculate Jill’s taxable estate
b. Calculate the amount of Jill’s estate tax