Curtis established an irrevocable trust six years ago which he funded with dividend-paying securities worth $3 million. His partner, Owen, was the remainder beneficiary of the trust. Curtis filed IRS Form 709 for the remainder interest gift of $850,000 in the year the gift was made. Curtis died last week when the trust was valued at $3.7 million. Which statement correctly identifies the consequences of this transfer?

Select one:

a.

$850,000 is included as an adjusted taxable gift on Curtiss estate tax return.

b.

The tax paid on the remainder interest gift is included in Curtiss gross estate under the gross-up rule.

c.

The $3.7 million trust is added to Curtiss gross estate.

d.

Curtis cannot use a full unified credit of 2,081,800 on his estate tax return to offset his estate tax because he used a portion of the credit six years ago against the taxable gift.