Table of Contents

Interrelated Computations .......................................................................................................... 1

Part I - Tables ............................................................................................................................... 1

Part II - Computation Methods ................................................................................................... 2

Trial and Substitution Method ........................................................................... 2 Conventional Option .......................................................................................... 3 Alternate Option ................................................................................................. 3 Algebraic Method ............................................................................................... 4

Part III - Estate Tax ..................................................................................................................... 4

Estate Tax Example 1 – Trial and Substitution Method ............................... 4 Estate Tax Example 2 – Algebraic Method .................................................11 Estate Tax Example 3 – Trial and Substitution Method .............................. 13

Estate Tax Example 4 – Algebraic Method ................................................ 20

Part IV - Gift Tax .......................................................................................................................... 22

Gift Tax Example 1 – Trial and Substitution Method .................................. 23 Gift Tax Example 2 – Algebraic Method ...................................................... 24

Gift Tax Example 3 – Trial and Substitution Method ................................... 26 Gift Tax Example 4 – Algebraic Method ...................................................... 31 Gift Tax Example 5 – Trial and Substitution Method .................................. 34

Gift Tax Example 6 – Algebraic Method ....................................................... 39

Publication 904 (Rev. 02-2023) Catalog Number 20864U Department of the Treasury Internal Revenue Service www.irs.gov

Interrelated Computations

The explanations and examples in this publication reflect the interpretation by the Internal Revenue Service (IRS) of:

• Tax laws enacted by Congress,

• Treasury regulations, and

• Court decisions.

However, the information given does not cover every situation and is not intended to replace the law or change its meaning.

This publication covers some subjects on which a court may have made a decision more favorable to taxpayers than the interpretation by the IRS. Until these differing interpretations are resolved by higher court decisions or in some other way, this publication will continue to present the interpretations by the IRS.