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. (e) Fred transferred $40,000 to the Wilfong Trust. A bank is the trustee,and the trust is to last for 12 years. The trust instrument provides that one-half of the trust income must be paid to Ernest each year .The trustee has discretion to distribute to Ernest the other one-half of the income, as well as any or all of the principal. Upon termination of the trust, the principal and accumulated income are to be paid to Edgar