PFIN 5th Edition by Randall Billingsley,Lawrence Gitman,Michael Joehnk

Exercise 7

Calculation of estate taxes. Use Worksheet 15.2. When Reuben Mosher died in 2015, he left an estate valued at $5,850,000. His trust directed distribution as follows: $20,000 to the local hospital, $160,000 to his alma mater, and the remainder to his three adult children. Death-related costs were $6,800 for funeral expenses, $40,000 paid to attorneys, $5,000 paid to accountants, and $30,000 paid to the trustee of his living trust. In addition, there were debts of $125,000. Use Exhibits 15.5 and 15.6 to calculate the federal estate tax due on his estate.