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Example 7
This is a simple extension of the sixth sample computation. In this computation, interest is computed and deducted for one additional period. The additional data for this computation is simple:
Step 1Open the program by double clicking on the icon if it is not already open. Step 2Click on the File menu and select the Open option. In the Open dialog box select the file you saved above, "Sample6". When it is loaded, go to the File menu and select Save As to save the file under a new name. Save it under the name "Sample7". Notice that the name on the title bar has changed to "Sample7" showing that the new name was accepted. Step 3Next we will go to the federal interest input section and enter the extra payment. Click on the Fed Int button on the Case Bar to the left of the DeskTop. This will place us in the Federal Interest Input dialog box. We will now enter the payment on 10/15/88 and enter a new computation date. Click on the Period Data button. This will bring you to the Interest Period Data dialog box. Double Click on the 10/15/88 period line in the list box. This will bring you to the Interest Period Data dialog box for this date. Hit Tab once to move to the Tax Payment edit box and enter "2,276.27". Hit Tab once to move to the Interest Payment edit box and enter "56,687.57". Hit Enter to accept this entry and return to the Interest Period Data dialog box. We now need to enter a new computation date. Click on the Add Period button. This will bring you to the Interest Period Data dialog box for a new date. Enter a date of 10/15/89. After you enter this date you need to change two more things in this dialog box. First change the tax payment allocation method to 'B' and second change the interest payment allocation method to 'a'. You can do this with your mouse. After you have done this, hit Enter to accept this entry and return to the Interest Period Data dialog box. Click on OK to accept the changes made to this point. Step 4We have finished this computation. The next thing to to is to save this file. Click the Save Button on the Tool Bar or from the File menu select Save. Check your answer against the program output shown below.
Program OutputEstate of: Sam Spade, DD: 1 15 1987
Memorandum: Seventh sample computation.
File Name: D:\TEST\EST3\Sample7.ET3, (Standard Output)
Inter-Est Version 3.00, Release 00
Date and time of run: Tuesday, December 26, 1995, 12:27 PM
MAIN PRINTOUT SECTION
Gross Estate 3,500,000.00
Sch. JK&L (before interrelated) 275,000.00
Int, Federal 113,175.36
Debts & Expenses 388,175.36
Marital Deduction 0.00
Charitable Deduction 0.00
Total Deductions 388,175.36
Taxable Estate 3,111,824.64
Adjusted Taxable Gifts 0.00
Total Amount Drawing Tax 3,111,824.64
Tentative Tax 1,352,303.55
Aggregate Gift Tax Paid 0.00
Tax before Unified Credit 1,352,303.55
Unified Credit from Table 192,800.00
Adjustment to Unified Credit 0.00
Net Unified Credit 192,800.00
Tax before SDTC 1,159,503.55
State Death Tax Credit 191,935.17
Net Tax after State Death Tax Credit 967,568.38
Gift Tax Credit 0.00
Foreign Death Tax Credit (Statutory) 0.00
Prior Transfer Credit 0.00
Foreign Death Tax Credit (Treaty) 0.00
Total Credits 0.00
Estate Tax 967,568.38
Generation Skipping Transfer Tax 0.00
Increased Estate Tax 0.00
Total Federal Tax 967,568.38
FEDERAL INTEREST OPTION SELECTED
Interest Table File: D:\TEST\EST3\Federal.IT4
Interest Table Description: Federal (RProc 95-17)(6/95)
Special Interest Rate Used: 4.0000000 %
INTEREST FACTORS USED
Regular Special Refund
Pd # 1 c 10.8424135 % 4.0832493 % 9.7391743 %
Pd # 2 c 12.1797336 % 4.0784499 % 11.0645010 %
Sec. 6166 Installment Option Elected Closely Held Business Amount 2,000,000.00 Fed. Gross Estate 3,500,000.00 JK&L before Int. <275,000.00> Adjusted Gross Estate (6166) 3,225,000.00 Qualifying Percentage 62.0155039 %
Number of Regular Tax Payments 10
Years Installment Tax Payments Delayed 5
Total Qualified Tax 600,042.41
Tax Qualified for Special Rate 153,000.00
Other Qualified Tax 447,042.41
Tax Not Qualified 367,525.97
Qualified Tax which was Extended 592,568.38
PART 1
Date Tax Pmt. Int. Pmt.
Due Date 10 15 1987 375,000.00 0.00 Da P
Pd # 1 10 15 1988 2,276.27 56,687.57 Ba
Pd # 2 10 15 1989 -------------- -------------- Ba
Sec. 6166 Flags
First Flag, Principal Allocation:
A = Deficiency or Interim Payment with Normal Allocation
B = Installment Date with Only Interest Payment Due
C = Installment Date with Tax Payment and Interest Payment Due
D = Payment on or Before Date Return was Filed
E = All tax moved to Non-Qualified (Election Terminated)
Second Flag, Interest Allocation:
a = Balance moved to Non-Qualified (Installment Date or Termination)
b = Allocate to All Interest Equally (Deficiency Pmt, Extra Pmt)
c = Allocate to Non-Qualified then Qualified (Special Direction)
d = Allocate to Non-Qua. then, Reg. Qua. then 4% Qua. (Special Dir.)
e = Allocate to Amounts drawing Regular Rate First (Special Direction)
SA = Special Allocation: Non-Qua. Tax, then Interest, then Qual. Tax
All = All tax and interest draws the regular interest rate
P = Period entry for Interest on Penalty Computation
PART 2
Starting Tax Interest Applied
Balance Paid Balance To Balance
Due Date 967,568.38 375,000.00 0.00 375,000.00
Pd # 1 592,568.38 2,276.27 <2,780.38> 5,056.65
Pd # 2 587,511.73 0.00 59,268.17 0.00
PART 3
Interest Total Amount Interest
Drawing Int. Drawing Int. Factor Interest
Period # 1
Qua. (4%) 0.00 153,000.00 4.0832493 % 6,247.37
Oth. Qua 0.00 439,568.38 10.8424135 % 47,659.82
Non-Qua. 0.00 0.00 10.8424135 % 0.00
Period # 2
Qua. (4%) 0.00 151,694.38 4.0784499 % 6,186.78
Oth. Qua 0.00 435,817.35 12.1797336 % 53,081.39
Non-Qua. 0.00 0.00 12.1797336 % 0.00
Total Interest Deduction 113,175.36
LAST LINE OF PRINTOUT Previous Example Home Page Top of Page Next Example
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