Estate tax formula

Question 1

Estate tax formula

Answer 1

1. Gross estate
2. – Expenses, debts, and losses
3. = Adjusted gross estate (AGE)*
4. – Total allowable deductions
5. = Taxable estate
6. • Adjusted taxable gifts (post-1976)
7. Compute: Tentative tax base (8) Compute: Tentative tax (9) Less: Tax deemed paid on prior taxable gifts (10) Equals: Estate tax before reduction for allowable credits (11) Less: Applicable credit amount Other credits (12) Equals: Estate tax liability

Question 2

Expenses, debts, and losses

Answer 2

1. Funeral and administrative expenses
2. Debts of decedent, mortgages, losses

Question 3

(4) Total allowable deductions

Answer 3

1. Charitable deduction
2. Marital deduction
3. State death taxes

Question 4

Adjusted Gross Estate

Answer 4

The term “Adjusted Gross Estate” does not appear on Form 706

However, this concept applies to

• Section 303
• Section 6166
• Section 2032A