I understand why its 1-Te for bequest, since it doesn’t need to be compounded as tax is paid at the time of death. But for FV gift, why is (1-Tg) not compounded? Isn’t gift tax paid every time a gift is transferred?
The gift is transferred only once.
My doubt arises from this question, we annually compound to get investment returns for gifts, does this imply that 50,000 is gifted each year? If yes, why wouldn’t it make sense to compound the gift tax also?
No it is a one off gift.
Gifts every year would be annuities.
Thank you!