1. James A. and Ella R. Polk, ages 70 and 65, respectively, are retired physicians who live at 3319 Taylorcrest Street, Houston, Texas 77079. Their three adult children (Benjamin Polk, Michael Polk, and Olivia Turner) are mature and responsible persons. The Polks have heard that some in Congress have proposed lowering the Federal gift tax exclusion to $3,000,000. Although this change likely will not occur, the Polks believe that they should take advantage of the more generous exclusion available under existing law. Thus, the Polks make transfers of many of their high-value investments. These and other gifts made during the year are summarized below. Donor Asset Transfer Condominium located in Conroe (TX) acquired in 2009, cost $1,200,000, to Benjamin, Michael, and Olivia as equal tenants in common. Office building, located in Round Rock (TX) built in 2011, cost $1,800,000, to Benjamin, Michael, and Olivia as equal tenants in common. Vacation ranch in Bandera (TX) inherited by James from his father in 2006, value then $900,000, to Benjamin, Michael, and Olivia as equal joint tenants with right of survivorship. Ella used her separate property to reimburse her father (Alan Roberts) for his heart bypass operation. Paid for daughter's (Olivia's) wedding to John Turner, a state-law obligation of support James used his separate property to purchase a new automobile (BMW) as a graduation present (from medical school) for his favorite niece (Carol Polk) James Ella $1,900,000 $1,900,000 2,300,000 2,300,000 2,600,000 82,000 20,000 20,000 42,000