Which of the following statements concerning the “gross-up” rule is (are) correct?
I Income taxes paid in the year of death are includible in the deceased’s gross estate.
II Gift taxes paid in the year of death are included in the deceased’s gross estate.
III Life insurance given in the year prior to the year of death is excluded from the deceased’s gross estate.
A. I only
B. II only
C. I and II only
D. II and III only
Provide a detailed explanation. This is estate planning.