Marcia died on June 1, 2015; survived by her husband, Asher and two sons, Clark and Dirk. Marcia’s only lifetime taxable gift was made in October 2012 in the taxable amount of $5.25 million in stock. She did not elect gift splitting. By the time of her death, the value of the gifted property (stock) had declined to $5.1 million.
Marcia’s executor discovered the items shown below. Amounts are the FMV’s of the items as of June 1, 2015.
Cash in checking account in her name $127,750
Cash in savings in her name $430,000
Stock in names of Marcia & Asher, joint tenants with right of survivorship. Asher provided all the considerations ($3,000) to purchase the stock $25,000
Land in the names of Marcia & Asher, joint tenants with right of survivorship. Asher provided all the consideration to purchase the land $360,000
Personal residence in only Marcia’s name $450,000
Life insurance on Marcia’s life. Marcia was owner and Marcia’s estate was beneficiary (face value) $5,000,000
Trust created under the will of Marcia’s mother (who died in 2000). Marcia was entitled to all the trust income for life, and she could will the trust property to whomever she desired. She willed it to her sons on equal amounts $700,000
Marcia’s debts as of her date of death were %60,000. Her funeral and administration expenses were $9,000 and $71,000 respectively. Her estate paid state death taxes of $65,000. The executor elected to deduct the administrative expenses on the estate tax return. Marcia’s will includes the following:
I leave my residence to my husband, Asher. $250,000 of property is to be transferred to a trust with First National Bank named as trustee. All of the income is to be paid to my husband, Asher, semiannually for the rest of his life. Upon his death, the property is to be divided equally between my two sons or their estates. I leave $47,000 to the American Cancer Society.
Assume the executor elected to claim the maximum marital deduction possible. Compute the following with respect to Marcia’s estate:
a. Gross Estate
b. Taxable Estate
c. Adjusted taxable Gifts
d. Estate tax base and basic exclusion amount portable to Asher
e. Tentative Tax on estate tax base
f. Federal Estate tax payable