Jack is single and he made his first taxable gift of 1000000

Jack is single and he made his first taxable gift of $1,000,000 in 2008. Jack made additional gifts in 2009, at which time he gave $1,792,000 to each of his three children and an additional $1,000,000 to State University (a charity). The annual exclusion in 2009 was $13,000. Recently Jack has been in poor health and would like you to estimate his estate tax should he die this year. Jack estimates his taxable estate (after deductions) will be worth $5.61 million at his death. (Refer to Exhibit 25-1 and Exhibit 25-2.) (Enter your answers in dollars and not in millions of dollars.)

Please show the work

Solution

Taxable gift made in 2008 =$10,00,000

Taxable gift made in 2009 =$53,76,000

Less:Exclusions. =$13000

So taxable estate will be worth $6.36 millions

Note: Amount given to state university as a charity is not taxable.