During the current year, an estate generates the following income amounts: Rental income $10,000, Interest income 4,000, Dividend income 6,000. The rental income is conveyed immediately to the beneficiary stated in the decedent's will. Dividends of $2,000 are donated to the decedent's church. What amount of federal income tax must be paid by the estate?
What will be an ideal response?
| Rental income | $ | 10,000 | |
| Interest income | 4,000 | ||
| Dividend income | 6,000 | ||
| Total income | $ | 20,000 | |
| Estate exemption | (600 | ) | |
| Gift to charity | 2,000 | ) | |
| Distributed to beneficiary | 10,000 | ) | |
| Taxable income | $ | 7,400 | |
? | |||
| ? | |||
| Income Tax: | |||
| ? | |||
| 15% on the first $2,550 | $ | 382.50 | |
| 25% on the next $3,400 (subtotal $5,950) | 850.00 | ||
| 28% on the next $1,450 (subtotal $7,400) | 406.00 | ||
| Total Federal income tax | $ | 1,638.50 | |
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