Natalie transferred $500,000 of bonds to a revocable trust with directions to the trustee to pay income to her aunt for five years, after which the corpus is to be distributed to Natalie's niece. At year-end, the trustee paid $16,000 of income to the aunt. Which of the following is a true statement?
A. Natalie has not made a complete gift because the trust is revocable.
B. Natalie has made a taxable gift of $16,000.
C. Natalie has made a complete gift of $500,000.
D. Natalie has made a taxable gift of $1,000.
E. None of the choices are correct.
Answer: D
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