hard · Certified Financial Planner Investment Planning
A client, Ortega, gifts $500,000 in cash to a child and dies two years later.
Under the '3-Year Lookback Rule' (Section 2035), what is brought back into Ortega's gross estate?
- Nothing is brought back because cash is not an 'incident of ownership.'
- The value of the gift minus the $19,000 annual exclusion.
- Only any out-of-pocket gift tax paid on the transfer.
- The full $500,000 cash gift plus any appreciation.
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