American College Exam HS330 Topic 1 Question 3 Discussion

A married man died this year leaving a gross estate of $3,200,000. Additional facts concerning his estate are:

Administration expenses and debts $ 250,000

Marital deduction 1,200,000

Applicable credit amount (2005) 555,800

Applicable exclusion amount (2005) 1,500,000

State death taxes payable 20,400

Under the Unified Rate Schedule for computing estate taxes if the amount with respect to which the tentative tax to be computed is over$1,000,000 but not over $1,250,000, the tentative tax is $345,800, plus 41 percent of the excess of such amount over $1,000,000. If the amount is over $1,250,000 but not over $1,500,000, the tentative tax is then $448,300, plus 43 percent of the excess of such amount over $1,250,000. If the amount is over $1,500,000 but not over $2,000,000, the tentative tax is then $555,800 plus 45% of the excess of such amount over $1,500,000. Based on these facts, the net federal estate tax payable is