Fred is very generous. During the current year he made gifts as described below. In the case of each gift, state whether any portion of the gift constitutes a present interest for purposes of § 2503(b), thereby qualifying for the annual per donee exclusion. (a) Fred gave $13,000 in cash to Artemis. (b) Fred gave to Betty an insurance policy on Fred's life. The amount payable upon Fred's death is $100,000. Betty has an insurable interest in Fred's life, and at the time of the gift the policy had a market value of $5,000. (c) Fred paid the annual premium of $3,000 under a $100,000 insurance policy on Fred's life owned by Carl, who has an insurable interest in Fred's life. (d) Fred contributed $39,000 to Powell Corporation, a manufacturing business. The stock of Powell Corporation is owned in equal one-third amounts by Dalton, Dewey, and Doris. Fred has no interest in the corporation.

Answer rating: 100% (QA)

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