Sam and Judy married last year. Sam is very wealthy and had Judy sign a prenuptial agreement. Judy did not want a family, but Sam promised to put $1,000,000 in a bank account solely in her name if she has a child. Judy agrees and gives birth to a child one-year later. Sam puts the $1,000,000 in Judy's bank account. Is this a taxable gift? Explain.

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The Answer of Sam and Judy married last year. Sam is very wealthy and had Judy sign a prenuptial agreement. Judy did not want a family, but Sam promised to put $1,000,000 in a bank account solely in her name if she has a child. Judy agrees and gives birth to a child one-year later. Sam puts the $1,000,000 in Judy's bank account. Is this a taxable gift? Explain.

Sam and Judy Married Last Year