SIE Exam Question 15: Answer and Explanation

Question: 15

If a person has made lifetime gifts totaling $4,000,000 and dies in 2020, what is the amount that will be paid in taxes if the total remaining estate is $20,000,000?

• A. $2,400,000
• B. $4,968,000
• C. $5,600,000
• D. $7,400,000

Correct Answer: B

Explanation:

If a person has made lifetime gifts totaling $4,000,000 and dies in 2020, the amount that will be paid in taxes if the total remaining estate is $20,000,000 is $4,968,000. ($11,580,000 - $4,000,000 = $7,580,000 remaining exclusion amount; $20,000,000 - $7,580,000 = $12,420,000 taxable amount; $12,420,000 x 40 percent = $4,968,000.)