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25 Jul 2017, 11:24
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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 $1.25 million, then the federal tax due is approximately what percent of the value of the estate? A. 30% B. 35% C. 40% D. 45% E. 50% _________________ Senior SC Moderator Joined: 22 May 2016 Posts: 3664 If the amount of federal estate tax due on an estate valued at$ 1.35  [#permalink]

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25 Jul 2017, 17:45
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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 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%

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Re: If the amount of federal estate tax due on an estate valued at $1.35 [#permalink] Show Tags 09 Aug 2017, 13:31 1 carcass wrote: If the amount of federal estate tax due on an estate valued at$ 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%.

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