PFIN 2nd Edition by Lawrence Gitman ,Michael Joehnk,Randall Billingsley

Exercise 6

Fred died in 2011, leaving an estate of $23,000,000. Fred's wife died in 2009. In 2009, Fred gave his son property that resulted in a taxable gift of $3,000,000 and upon which Fred paid $885,000 in transfer taxes. Fred had made no other taxable gifts during his life. Fred's will provided a charitable bequest of $1,000,000 to his church. Determine the federal transfer tax on Fred's estate.