Tom Hruise was an entertainment executive who had a fatal accident on a film set. Tom’s will directed his…

Tom Hruise was an entertainment executive who had a fatal accident on a film set. Tom’s will directed his…

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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 spouse, Kaffie, and the real estate to a church, The First Church of Methodology. The
remainder of Tom’s assets were to be placed in trust for three children. Tom’s estate consisted of the following:
Assets:
Personal assets
Cash and stock
Intangible assets (film rights)
Real estate
Liabilities:
Mortgage
Other liabilities
Gross estate
Marital Deduction
Charitable Deduction
$1,790,000
24,800,000
75,500,000
15,800,000
$ 117,890,000
Problem 25-50 Part a (Algo)
a. Tom made a taxable gift of $5.90 million in 2011. Compute the estate tax for Tom’s estate.
Debts
Taxable Estate
Adjusted taxable gifts
Cumulative taxable transfers
Tax on cumulative transfers
Less taxes paid on prior gifts
$ 4,000,000
4,900,000
$ 8,900,000
$
$
$
117,890,000
(24,800,000)
(15,800,000)
(8,900,000)
68,390,000
5,900,000
74,290,000
360,000
9

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To calculate Tom Hruise s estate tax we ll follow the provided information and perform the necessary
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