McGraw-Hill's Taxation of Business Entities 3rd Edition by Connie Weaver, Brian Spilker, Edmund Outslay, John Robinson, Ronald Worsham, Benjamin Ayers, John Barrick

Exercise 40

Harold and Maude are married and live in a common law state. Neither have made any taxable gifts and Maude owns (holds title) all their property. She dies with a taxable estate of $10 million and leaves it all to Harold. He dies several years later, leaving the entire $10 million to their three children. Calculate how much estate tax would have been saved using the 2011 rate schedule and unified credit if Maude had used a bypass provision in her will to direct $4 million to her children and the remaining $6 million to Harold. Ignore all credits in this problem except for the unified credit.