In 2017 Warren made $600,000 in taxable gifts but did not have to pay any gift tax. The unified credit was $4,577,800. In 2021, when Warren died, the gifted property was worth $825,000. Warren's taxable estate was (gross estate minus estate tax deductions) was $11,580,000. The prevailing estate tax rate was 40%. HINT: Use the template below to compute Warren's estate tax payable in 2021 Taxable estate........ ..$................. Add: Adjustable taxable gifts.......... Total Estate Tax Base............ .$. Estate Tax Payable = [prevailing tax rate of 40% x Total Estate Tax Base) - (Unified credit)] ***************

In 2017 Warren made $600,000 in taxable gifts but did not have to pay any gift tax. The unified credit was $4,577,800. In 2021, when Warren died, the gifted property was worth $825,000. Warren's taxable estate was (gross estate minus estate tax deductions) was $11,580,000. The prevailing estate tax rate was 40%. HINT: Use the template below to compute Warren's estate tax payable in 2021 Taxable estate........ ..$................. Add: Adjustable taxable gifts.......... Total Estate Tax Base............ .$. Estate Tax Payable = [prevailing tax rate of 40% x Total Estate Tax Base) - (Unified credit)] ***************

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter12: Alternative Minimum Tax

Section: Chapter Questions

Problem 18DQ: During the year, Rachel earned 18,000 of interest income on private activity bonds that she had...

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Arthur Wesson, an unmarried individual who is age 68, reports taxable income of 510,000 in 2019. He records positive AMT adjustments of 80,000 and preferences of 35,000. Arthur itemizes his deductions, and his regular tax liability in 2019 is 153,694. a. What is Arthurs AMT? b. What is the total amount of Arthurs tax liability? c. Draft a letter to Arthur explaining why he must pay more than the regular income tax liability. Arthurs address is 100 Colonels Way, Conway, SC 29526.
On June 30, 2019, Kelly sold property for 240,000 cash and a 960,000 note due on September 30, 2020. The note will also pay 6% interest, which is slightly higher than the Federal rate. Kellys cost of the property was 400,000. She is concerned that Congress may increase the tax rate that will apply when the note is collected. Kellys after-tax rate of return on investments is 6%. a. What can Kelly do to avoid the expected higher tax rate? b. Assuming that Kellys marginal combined Federal and state tax rate is 25% in 2019, how much would the tax rates need to increase to make the option identified in part (a) advisable?
During the year, Rachel earned 18,000 of interest income on private activity bonds that she had purchased in 2014. She also incurred interest expense of 7,000 in connection with amounts borrowed to purchase the bonds. How do these amounts affect Rachels taxable income? Could there be a related beneficial effect in calculating AMTI? Explain.
Estate Taxes – Computation of Estate Tax Payable (Answer All questions) (a) In 2017 Warren made $600,000 in taxable gifts but did not have to pay any gift tax. The unified credit was $4,577,800. In 2021, when Warren died, the gifted property was worth $825,000. Warren’s taxable estate was (gross estate minus estate tax deductions) was $11,580,000. The prevailing estate tax rate was 40%. (Show detail work to receive full credit) HINT: Use the template below to compute Warren's estate tax payable in 2021 Taxable estate……………………………………$.................. Add: Adjustable taxable gifts……………………. ............ Total Estate Tax Base……………………………$ ................. Estate Tax Payable = [prevailing tax rate of 40% x Total Estate Tax Base) – (Unified credit)] (b) Explain to an executor an advantage and a disadvantage of electing the alternate valuation date (Textbook C:13-6).
Roland had a taxable estate of $15.6 million when he died this year. Required: Calculate the amount of estate tax due (if any) under the following alternatives. (Refer to Exhibit 25-1 and Exhibit 25-2.) (Enter your answers in dollars and not in millions of dollars.) a. Roland's prior taxable gifts consist of a taxable gift of $1 million in 2005. Estate tax due
1... In 2019, Madison makes taxable gifts totaling $5.25 million. Her only other taxable gifts amount to $1 million, all of which were made in 2014. Calculate the following: 1) total cumulate gifts; 2) gift tax on all lifetime gifts; 3) gift tax on 2019 gifts; 4) 2019 gift tax payable after using as much of her unified credit that is available.
69) In 2002, Gert made a $5,000,000 taxable gift. The 2002 gift tax on $5,000,000 was $2,275.800. Gert was entitled to a unified credit of $345,800, resulting in a gift tax of $1,193,000. The marginal tax rate in 2002 is 50%. For the year of Gert's death (2020), the marginal rate for $5,000,000 of transfers is 40%. the tax on $5,000,000 would equal $1,945,800 before subtracting any credit. In arriving at Gert's estate tax liability, what is the amount subtracted for 2002 gift taxes paid? please provide me an explanation
In 2020, Juliet Ulbod earned P500,000.00 as income from her beauty parlor and received P250,000.00 as Christmas gift from her spinster aunt. She had no other receipts for the year. She spent P150,000.00 for the operation of her beauty parlor. For tax purposes, her gross income for 2020 is (A) P750,000.00. (B) P500,000.00. (C) P350,000.00. (D) P600,000.00.
1 Roland had a taxable estate of $16.9 million when he died this year. Required: Calculate the amount of estate tax due (if any) under the following alternatives. (Refer to Exhibit 25-1 and Exhibit 25-2.) (Enter your answers in dollars and not in millions of dollars.) a. Roland’s prior taxable gifts consist of a taxable gift of $1 million in 2005. b. Roland’s prior taxable gifts consist of a taxable gift of $1.5 million in 2005. c. Roland made a $1 million taxable gift in the year prior to his death.
[The following information applies to the questions displayed below.] Henrich is a single taxpayer. In 2023, his taxable income is $542,000. What are his income tax and net investment income tax liability in each of the following alternative scenarios? Use Tax Rate Schedule, Dividends and Capital Gains Tax Rates for reference. Note: Do not round intermediate calculations. Leave no answer blank. Enter zero if applicable. Round your final answers to 2 decimal places. d. Henrich has $201,000 of taxable income, which includes $52,400 of long-term capital gain that is taxed at preferential rates. Assume his modified AGI is $222,000. Income tax Net investment income tax Total tax liability Amount
Required information [The following information applies to the questions displayed below.] Banele had a taxable estate of $16.6 million when they died this year. Calculate the amount of estate tax due (if any) under the following alternatives. (Refer to Exhibit 25-1 and Exhibit 25-2.) Note: Enter your answers in dollars and not in millions of dollars. a. Banele's prior taxable gifts consist of a taxable gift of $1 million in 2005. × Answer is complete but not entirely correct. Estate tax due $ 4,680,000 ×
Asok's AGI for 2023 is $133,250. Included in this AGI is a $45,000 25% long-term capital gain and a $13,000 0%/15%/20% long-term capital gain. Asok is single and uses the standard deduction. Compute his taxable income, the tax liability, and the tax savings from the alternative tax on net capital gain. Click here to access the tax rate schedules to use for this problem. When computing the tax on the gain, calculate each part separately, rounding interim calculations to two decimal places. Then, round your final answer for the tax to the nearest dollar. Hint: The 25% gain is calculated at two different rates. • Asok's taxable income: $ • His regular tax liability: $ 120,850 X 23,084 X • His tax liability using the alternative tax approach: $ • The tax savings from using the alternative tax approach: $ 21,914 X 1,170