Jose dies in the current year and has a gross estate valued at $8,000,000.During his lifetime (but after 1976)Jose had made taxable gifts of $400,000.The estate incurs funeral and administrative expenses of $100,000 and also pays off Jose's debts which amount to $300,000.Jose bequeaths $500,000 to his wife.What is the amount of Jose's tax base,the amount on which the estate tax is computed?
A)$7,100,000
B)$7,500,000
C)$1,650,000
D)$2,050,000

Question

Quizplus · Accepted Answer

The tax base is calculated as follows:
Gross Estate $8,000,000
Add: Taxable gifts made after 1976 $400,000
Subtract: Funeral and administrative expenses $100,000
Subtract: Debts $300,000
Subtract: Marital deduction $500,000
Tax Base $7,500,000

Jose Dies in the Current Year and Has a Gross