Thomas dies in the current year and has a gross estate valued at $3,000,000.During his lifetime (but after 1976)Thomas had made taxable gifts of $400,000.The estate incurs funeral and administrative expenses of $100,000 and also pays off Thomas' debts which amount to $300,000.Thomas bequeaths $500,000 to his wife.What is the amount of Thomas' tax base,the amount on which the estate tax is computed?
A)$2,100,000
B)$2,500,000
C)$2,600,000
D)$3,400,000

Question

Quizplus · Accepted Answer

The tax base is calculated as follows:
Gross estate $3,000,000
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: $2,500,000

Thomas Dies in the Current Year and Has a Gross