In 20x1, T gave her $1 million life insurance policy (cash surrender value at that time $100,000) to her son. T retained no powers of appointment or other rights of ownership with respect to this policy. No gift tax was due on this gift T died unexpectedly 18 months later, and the proceeds of the life insurance policy were paid to Son.

Explain:

a. With respect to this situation, how much, if any, is included in T's gross estate? What is the statutory authority for your answer?

b. Does Son have any income tax consequences as to the $1 million death benefit received?