Cherry's widowed mother, Nancy, had to quit working for health reasons and now her only income is $1,100 per month from Social Security. Cherry recently became partner of a law firm and has moved into the 33% marginal tax bracket. Cherry's mother steadfastly insists on living independently so Cherry gave her mother $200,000 in 9% corporate bonds to supplement her income-.
a. How much of her lifetime unified credit and related exclusion amount must Cherry use to avoid paying a gift tax?
b. How much income taxes are saved by the transfer of the bonds by Cherry to her mother?