Data:

Jonathan, a single man, passed away in December 2009. The value of his assets at the time of death was $4,155,000. He also owned an insurance policy with a face value of $315,000 (which was not in an irrevocable trust). The cost of his funeral was $19,750, while estate administrative costs totaled $67,000. As stipulated in his will, he left $154,000 to charities. Also, for each of the past three years (2003-2005), Jonathan had provided his niece Suzy with $18,000 per year funding for college tuition. Of this $18,000, $5,000 was paid directly to the college for tuition and fees, and the remaining $13,000 was paid to his niece to cover her living expenses while she was going to school. In addition to paying for his niece’s schooling, he also gave his niece $25,000 as a late graduation present in 2006 for a down payment on a new house.

Calculations:

a. Determine the value of Jonathan’s gross estate, his taxable estate, his gift-adjusted taxable estate, and his year 2009 estate tax. The annual tax-free gift limit: 2006+: 12,000, 2003-2005: $11,000, 1982-2002: $10,000.