In 2009, Katherine made some taxable gifts upon which she paid a Federal gift tax of $96,000. If Katherine dies in 2011, the $96,000 is included in her gross estate under the "gross up" rule.

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The "gross up" rule requires including the amount of gift tax paid by the donor in their gross estate for estate tax purposes. Therefore, Katherine's gift tax of $96,000 will be included in her gross estate upon her death in 2011.

In 2009, Katherine Made Some Taxable Gifts Upon Which She