McGraw-Hill's Taxation of Individuals and Business Entities 3rd Edition by Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

Exercise 53

Willie purchased a whole-life insurance policy on his brother, Benny.Under the policy, the insurance company will pay the named beneficiary $100,000 upon the death of the insured, Benny.Willie names Tess the beneficiary, and upon Benny's death, Tess receives the proceeds of the policy, $100,000.Identify and discuss the transfer tax implications of this arrangement.