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 to two tax assessments:
1) one for a flat $437,000 (paid no matter what), and
2) another for 43 percent of
any amount of estate value that exceeds $1,250,000
-- This estate's value exceeds the cutoff by $100,000:
\(($1,350,000 - 1,250,000) = $100,000\) -- A 43% tax is DUE on the excess $100,000 = $43,000
#1 + #2 = total tax due
$437,000 + $43,000 = $480,000 total tax due
Tax due as a percent of the value of the estate (get rid of four zeros):
\(\frac{TotalTaxes}{Estate Value}=(\frac{48}{135}*100)\approx(.35*100)\)
is approximately 35%
Answer B
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