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Problem - Bob died in year 3. His gross estate consisted of assets with a fair market value of $13,500,000. In his will, Bob leaves $1,000,000 to his wife, $500,000 to his only daughter, and $250,000 to his favorite charity. Prior to Bob's death, he was involved in a lawsuit when one of his tenants slipped and fell at one of the rental properties owned by Bob. After his death, the personal representative settled the lawsuit for $750,000. The expenses to close Bob's estate were $50,000. In year 3, the Federal estate exclusion amount is $11,000,000. What amount, if any, does Bob's estate exceed the $11,000,000 exclusion amount?
a. $450,000
b. $500,000
c. $1,200,000
d. $0
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