hard · Certified Financial Planner Retirement

The Brennan household learns that a family member died two years after gifting a life insurance policy (face value 1,000,000) and 500,000 in blue-chip stocks to an Irrevocable Life Insurance Trust (ILIT). The donor paid 40,000 in gift tax on these transfers.

Under Section 2035, what is brought back into the donor's gross estate?

  1. 40,000
  2. 1,540,000
  3. 1,040,000
  4. 1,000,000

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