Estates?

Q: Can some one fill me in on the 1998 income tax rates for estates? We just received the final accounting on my father's estate (I am not the executor) and the CPA who did the taxes estimated for the attorney that the estate would have federal income taxes of $13900 on income of about $35,000. This income consists of about $8000 in interest and $27,000 on capital gains from the sale of real estate held for 18 months by the estate after my father's death. By my calculations, that appears to be a 39.6% rate on all income with no break for long-term capital gains, and no marginal. This appears to be outrageously high and possibly wrong. Does this appear correct?

A: -Estate/Trust income taxes is 39.6% on amounts above 8,350. Taxes are 2,360 on the first 8,350 then 39.6 on any amount over that. Therefore, the following computes the income on $35,000 of estate/trust income: (35000

- 8350) = (26650 x .396) = 10553 + 2,360 = 12,913 -No, the accountant's estimate does not appear correct--at least not to me. My calculations give a tax liability of $12,913.40 on an *ordinary* taxable income of $35,000 (meaning, *not* taking into account the capital gains tax preference). That's a $1,000 difference at first glance. Maybe we are dealing with semantics here, but how "crude" can an "estimate" be and still be correct? The highest marginal tax bracket is 39.6 percent for estate income. This kicks in at TI $8,350. It looks like the accountant just multiplied the TI by 39.6 percent, and didn't even bother with the capital gains rates.