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

Question

Quizplus · Accepted Answer

Damitria's gift to Tremayne is the sum of the policy's cash value ($9,000) and the unearned premium ($6,500, which is half of the $12,000 annual premium since the transfer is halfway through the year), totaling $15,500.

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