Bobby was very successful in his career, and although he had no children of his own he shared his success with his family. Bobby's sister, Katie, had a son named Joe in 2015. In that same year, created a trust for her nephew's benefit. The trust instrument provided that the income from the principal should be accumulated in the trust until Joe turned 18 years old, at which time the prin and accumulated income would be distributed to Joe. The trust provided that in any year in which Bobby makes a contribution to the trust, any and all beneficiaries of the trust have an unrestricted to withdraw from the trust an amount equal to the annual exclusion under $ 2503(b) applicable for the year of the contribution; the trust also indicated that this withdrawal right will expire 30 days: the date of the contribution to the trust

At the time the trust was created in 2015, Bobby wasn't sure if Katie would have any more children. As a result, Bobby reserved the right to change the beneficiaries of the trust. She also reserved the right to revoke the trust, as well as change the terms of the trust. When Katie later gave birth to a daughter (named Mary), Bobby modified the trust to have included Mary (the modification is described below).

Below is a summary of events that occurred:

A. March 6, 2015 - Bobby created the trust described above and deposited $20,000 in it.

B. March 27, 2016 - Bobby relinquished the right to revoke the trust.

C. April 1, 2017 - Bobby deposited $30,000 in the trust.

D. February 19, 2018 - Bobby modified the terms of the trust as follows Income from the principal will be accumulated in the trust for twenty years (from the date of modification), and after twenty years the principal and accumulated income will be divided equally and distributed to Joe and Mary. The withdrawal right that appeared in the original trust document continued to exist unchanged in the modified trust document.

E. January 3, 2019 - Bobby deposited $40,000 in the trust.

F. November 18, 2020 - Bobby relinquished her right to change the beneficiaries of the trust and she also relinquished her right to change the terms of the trust.

G. March 19, 2021 - Bobby deposited $50,000 in the trust.

Neither Joe nor Mary ever exercised their rights to withdraw from the trust.

For each part below (i.e., A through G), explain whether the event that occurred during the particular year resulted in a completed gift for transfer tax purposes.

If a gift did not occur as a result of the event, explain why not.

• If a gift did occur as a result of the event, explain why and indicate the following:

1. The amount of the gift

2. The amount of the taxable gift

Answer rating: 100% (QA)

For each part below ie A through G explain whether the event that occurred during the particular yea... View the full answer