On September 1, George Transfers His Entire Ownership Rights in a $250,000

question 95

Essay

On September 1, George transfers his entire ownership rights in a $250,000 life insurance policy on his own life to his sister, Sally. The policy's interpolated terminal reserve is $30,000 as of September 1. On July 1, George had paid the policy's $6,000 annual premium. On July 1 of the subsequent year, George again paid the premium on the policy. What are the gift tax consequences in the subsequent year, if any?

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Definitions:

Throat Region

The anterior part of the neck, through which food and air pass to the esophagus and trachea respectively.

Bronchi

The major air passages of the lungs that diverge from the windpipe, facilitating the transport of air in and out of the lungs.

Alveoli

Tiny air sacs within the lungs where the exchange of oxygen and carbon dioxide occurs.

Gas Exchange

The process of exchanging oxygen and carbon dioxide between an organism and its environment, fundamental for respiration in living beings.