Jeffery Died in 2018 Leaving a $16,000,000 Gross Estate

question 1249

Essay

Jeffery died in 2018 leaving a $16,000,000 gross estate. Six months after his death, the gross assets are valued at
$16,100,000. In years prior to 2018 (but after 1976), Jeffery had made taxable gifts of $300,000. Of the $16,000,000 gross estate, estate assets valued at $3 million were transferred to his wife and $100,000 was used to pay administrative and funeral expenses. Jeffery had debts of $200,000, and the remainder of the estate was transferr to his children.
a. What is the amount of Jeffery's taxable estate?
b. What is the tax base for computing Jeffery's estate?
c. What is the amount of estate tax owed if the unified credit is $4,417,800?
d. Alternatively, if six months after his death, the gross assets in Jeffery's estate declined in value to $15,000,000 administrator of Jeffery's estate elect the alternate valuation date?

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