$1.$ Regarding the formula for the Federal gift tax $($see Concept Summary $27\mathrm{.}1),$ comment on the following observations.

a$.$ The annual exclusion is adjusted each year for inflation?

b$.$ The charitable and marital deductions play an important role?

c$.$ Some gratuitous transfers might not be subject to the gift tax?

$2.$ Three unmarried and childless sisters live together. All are of advanced age and in poor health, and each owns a significant amount of wealth. Each has a will that passes her property to her surviving sister$($s$)$ or$,$ if no survivor, to their church. Within a period of two years and on different dates, all three sisters die. Discuss the Federal estate tax consequences of these deaths.

$3.$ Kim, a wealthy Korean national, is advised by his physicians to have an operation performed at the Mayo Clinic in Minnesota. Kim is hesitant to come to the United States because of the possible tax consequences. If the procedure is not successful, Kim does not want his wealth in Korea to be subject to the Federal estate tax. Are Kim$$s concerns justified? Explain.