During K's lifetime, he made taxable gifts totaling $750,000, on which he paid gift taxes of $169,000.All gifts were made after 1976.Upon K's death in the current year his taxable estate was $5,000,000.Based on these facts and ignoring the unified credit, what is the Federal estate tax payable by the estate of K?

Question

Quizplus · Accepted Answer

The taxable estate of K is $5,000,000. To determine the estate tax payable, we need to calculate the tentative tax, which is the tax on the total amount of taxable gifts ($750,000) and the taxable estate ($5,000,000) combined. The calculation is as follows:

Tax on $750,000 taxable gifts = $169,000
Tax on $5,000,000 taxable estate = $1,655,300
Tentative tax = $1,824,300

Therefore, the Federal estate tax payable by the estate of K is $1,824,300. Choice B is the correct answer.

During K's Lifetime, He Made Taxable Gifts Totaling $750,000, on Which