Question: During 2010, Blake transferred a corporate bond with a face amount and fair market value of $20,000 to a trust for the benefit of her

During 2010, Blake transferred a corporate bond with a face amount and fair market value of $20,000 to a trust for the benefit of her sixteen-year old child. Annual interest on this bond is $2,000, which is to be accumulated in the trust and distributed to the child on reaching the age of twentyone.

The bond is then to be distributed to the donor or her successor-in-interest in liquidation of the trust. Present value of the total interest to be received by the child is

$8,710. The amount of the gift that is excludable from taxable gifts is

a. $20,000

b. $13,000

c. $ 8,710

d. $0

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