Alice died during the current year with an estate of $3 million. Two years ago, she gifted $2 million (taxable gift) to her children and paid $435,000 of gift taxes and $500,000 of GSTT. What is the amount of her taxable estate?

taxable gift is not in the gross estate or taxable estate

Explanation:

given data

estate = $3 million

time = 2 year

taxable gift = $2 million

paid = $435,000

solution

as we know that gift tax paid will brought back in gross estate but not the GSTT

and gross up rule is limit for federal gift tax only

as It is only after taxable estate and taxable gift is add back to get tentative tax base

so as taxable gift is not in the gross estate or taxable estate