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If the amount of federal estate tax due on an estate valued at $ 1.35

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If the amount of federal estate tax due on an estate valued at $ 1.35 [#permalink]

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Question Stats:

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If the amount of federal estate tax due on an estate valued at $ 1.35 million is $ 437,000 plus 43 percent of the value of the estate in excess of $ 1.25 million, then the federal tax due is approximately what percent of the value of the estate?

A. 30%

B. 35%

C. 40%

D. 45%

E. 50%
[Reveal] Spoiler: OA

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If the amount of federal estate tax due on an estate valued at $ 1.35 [#permalink]

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carcass wrote:
If the amount of federal estate tax due on an estate valued at $ 1.35 million is $ 437,000 plus 43 percent of the value of the estate in excess of $ 1.25 million, then the federal tax due is approximately what percent of the value of the estate?

A. 30%

B. 35%

C. 40%

D. 45%

E. 50%

An estate worth $1,350,000 is subject, theoretically, to two tax assessments: one for a flat $437,000, and another for 43 percent of any amount that exceeds $1,250,000 in value.

This estate's value exceeds the cutoff by $100,000. (1,350,000 - 1,250,000 = $100,000.) 43 percent of 100,000 is $43,000

$437,000 + $43,000 = 480,000

\(\frac{Total taxes}{estate value}\) = \(\frac{480}{1350}\) * 100 is approximately 35%.

Answer B

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Re: If the amount of federal estate tax due on an estate valued at $ 1.35 [#permalink]

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New post 09 Aug 2017, 13:31
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carcass wrote:
If the amount of federal estate tax due on an estate valued at $ 1.35 million is $ 437,000 plus 43 percent of the value of the estate in excess of $ 1.25 million, then the federal tax due is approximately what percent of the value of the estate?

A. 30%

B. 35%

C. 40%

D. 45%

E. 50%


Let’s determine the tax due:

437,000 + 0.43(1,350,000 - 1,250,000)

437,000 + 0.43(100,000) = 437,000 + 43,000 = 480,000

Thus, the tax due is approximately 480,000/1,350,000 = 48/135 ≈35%.

Answer: B
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Re: If the amount of federal estate tax due on an estate valued at $ 1.35   [#permalink] 09 Aug 2017, 13:31
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If the amount of federal estate tax due on an estate valued at $ 1.35

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