A trust owns a life insurance policy. The beneficiaries of the trust are the wife and son. According to the attorney, the trust is GST exempt so GST allocations are required. The policy premium/taxable gift is $44,000. The previous gift tax returns don't treat this the same way. On one, the taxable gift is reduced by $14,000 annual exclusions for each beneficiary so line 1 on the first page of the Form 709 is $30,000, but no annual GST exclusion is used in Schedule D, part 2, line 5 so that line shows the full $44,000. In another year, the amounts are equal.
Which one is right?
Thanks for any help. Gary