Question

Mr. Lainson died this year on a date when the total FMV of his property was $12 million and his debts totaled $450,000. His executor paid $15,000 of funeral expenses and $50,000 of accounting and legal fees to settle the estate. Mr. Lainson bequeathed $1 million to Villanova University, $200,000 to the Lutheran church, and $3.5 million to his surviving spouse. He left the remainder of the estate to his children. Compute Mr. Lainson's taxable estate.

Answer 1

Based on the information given about Mr. Lainson, the taxable estate of the year will be $7,785,000.

The taxable estate for Mr Lainson will be calculated thus:

• FMV $12 million
• Less: Debt $450000
• Less: Funeral expense $15000
• Less: Legal fees $50000

• Less: Donation ($3.5 million + $200000) = $3.7 million
• Taxable estate = $7,785,000

The taxable estate of the year will be $7,785,000.

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