I refer to question 7 Aii of exam 2 (morning session) of the first exam book of schweser
It states that the tax code requires gift taxes to be paid by the recipient unless the gift is placed in an irrevocable trust. Gifts to irrevocable trusts allow the grantor to pay the tax gift.
The formula used in the answer is the formula of the relative value of taxfree gift. I’m confused because my understanding is that a tax gift (not estate gift) has to be paid by the grantor, so the formula i had in mind was the RV taxable gift paid by grantor (including in nominator: 1-Tg+TgTe…)?
Thanks in advance