Damitria transfers her rights in a $100,000 insurance policy on June 1 to Tremayne. The policy has a cash value of $9,000 and an interpolated terminal reserve of $8,500. The annual policy premium of $12,000 had been paid on January 1. Damitria's gift (before the annual gift tax exclusion) to Tremayne is

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The gift being transferred is the insurance policy, which has a cash value of $9,000 and an interpolated terminal reserve of $8,500. These add up to a total value of $17,500 (cash value + interpolated terminal reserve). In addition, the annual premium of $12,000 had already been paid, so Tremayne will not have to pay any premiums for the year. Therefore, the total value of the gift is $17,500 + $12,000 = $29,500. However, the annual gift tax exclusion is $15,000 per recipient. Since Tremayne is the sole recipient of the gift, Damitria's gift (before the annual gift tax exclusion) to Tremayne is $29,500, but after the exclusion it is $29,500 - $15,000 = $14,500. Therefore, the correct answer is option D ($15,500), as it is the closest amount to Damitria's actual gift after the annual exclusion.

Damitria Transfers Her Rights in a $100,000 Insurance Policy on June