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Determining Taxable Estate

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When Yuji dies in March 2009, his gross estate is valued at $6 million. He owes debts totaling $300,000. Funeral and administration expenses are $12,000 and $120,000, respectively. The marginal estate tax rate will exceed his estate's marginal income tax rate. Yuji wills his church $300,000 and his spouse $1.1 million. What is Yuji's taxable estate?

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When Yuji dies in March 2009, his gross estate is valued at $6 million. He owes debts totaling $300,000. Funeral and administration expenses are $12,000 and $120,000, respectively. The marginal estate tax rate will exceed his estate's marginal income tax rate. Yuji wills his church $300,000 and his spouse $1.1 million. What is Yuji's taxable estate?

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IRC Section 2001(a) states that "A tax is hereby imposed on the transfer of the taxable estate of every decedent who is a citizen or resident of the United States." IRC Section 2051 states that "For purposes of the tax imposed by section 2001, the value of the taxable estate shall be determined by deducting from the value of the gross estate the deductions provided for in this part." IRC Section 2053(a) states that "For purposes of the tax imposed by section 2001, the value of the taxable estate shall be determined by deducting from the value of the gross estate such amounts ... for funeral expenses, ... for administration expenses, ... for claims against the estate, and ... for unpaid mortgages on, or any indebtedness in respect of, property where the value of the decedent's ...

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