Grace transferred $800,000 into trust with the income to be paid annually to her spouse, Isaiah, for life and the remainder to Taylor. Calculate the amount of the taxable gifts from the transfers.
What will be an ideal response?
$785,000.
The life estate is not eligible for the marital deduction because this interest will terminate upon a future event (Isaiah's death) and then pass to another person (Taylor). Hence, the entire amount of the gift, less the 2019 annual exclusion for Isaiah's life estate, will be a taxable gift ($800,000 ? $15,000 = $785,000).
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