Please help with B., it\'s not making sense to me. Please show work. Thanks. :)

Question

Please help with B., it's not making sense to me. Please show work. Thanks. :)

Hank is a single individual who possesses a life insurance policy worth $330000 that will pay his two children a total of $950,000 upon his death. This year Hank transferred the policy and all incidents of ownership to an irrevocable trust that pays income annually to his two children for 15 years and then distributes the corpus to the children in equal shares. Reference the tax rate schedule in Exhibit 25-1 and the Unified Credit schedule in Exhibit 25-2 to answer this problem. (Enter your answers in dollars not in millions.) a Calculate the amount of gift tax due (if any) on the gift. Assume that Hank has made only one prior taxable gift of $5 million in 2011. (Leave no answer blank. Enter zero if applicable.) mount of gift tax $ b. Calculate the amount of cumulative taxable transfers for estate tax purposes if Hank dies this year but after the date of the gift. At the time of his death, Hank's probate estate is $9.4 million and it is to be divided in equal shares between his two children Amount of cumulative taxable transfers for estate tax purposes

Explanation / Answer

b)

Estate at death                 = 9400000

Less: net estate taxes due = 940000

To legal heirs                     = 8460000

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