Tom Hruise was an entertainment executive who had a fatal accident on a film set

Question

Tom Hruise was an entertainment executive who had a fatal accident on a film set. Tom’s will directed his executor to distribute his cash and stock to his wife, Kaffie, the real estate to his church, The First Church of Methodology, and the remainder of his assets were to be placed in trust for his three children. Tom’s estate consisted of the following:

Tom made a taxable gift of $5.90 million in 2011. Compute the estate tax for Tom’s estate. (Reference the tax rate schedule in Exhibit 25-1 and the Unified Credit schedule in Exhibit 25-2 to answer this problem.)

       Assets:      Personal assets $ 1,790,000      Cash and stock 24,800,000      Intangible assets (film rights) 75,500,000      Real estate 15,800,000      $ 117,890,000    Liabilities:      Mortgage $ 4,000,000      Other liabilities 4,900,000 $ 8,900,000

Tom made a taxable gift of $5.90 million in 2011. Compute the estate tax for Tom’s estate. (Reference the tax rate schedule in Exhibit 25-1 and the Unified Credit schedule in Exhibit 25-2 to answer this problem.)

Explanation / Answer

$ Gross Estate       117,890,000 Marital Deduction        (24,800,000) Charitable Deduction        (15,800,000) Debts         (8,900,000) Taxable Estate         68,390,000 Prior Taxable Gifts          5,900,000 Cumulative taxable transfers         74,290,000 Gross Estate Tax         25,979,213 Unified Tax          1,935,451 Estate Tax Due         24,043,762

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