U Puts $50,000 in a Trust to Provide Funds for His

U puts $50,000 in a trust to provide funds for his nephew's education.Any assets remaining in the trust when the nephew reaches 30 revert to U.The nephew is 28 and in medical school.The gift tax consequences are which of the following?

A) The value of the income interest given to the nephew is a separate gift and subject to gift tax.
B) This is a grantor trust, with all the income taxable to U; therefore, there are no gift tax consequences.
C) All $50,000 is subject to gift tax in the year the trust was created.
D) There is no gift tax because the income received by the nephew creates a moral obligation for his parent to repay; therefore, it is treated as a loan rather than a gift.