Final answer:
Bill's acquisition of property from his uncle with a full covenant and warranty deed, without any payment, is classified as a gift, since there was a voluntary transfer of property without compensation.
Step-by-step explanation:
If Bill's uncle gave him property with a full covenant and warranty deed without Bill having to pay for it, the correct characterization of this transaction would be a gift. A full covenant and warranty deed ensures that the grantor (the uncle) holds clear title to the property and has the right to transfer it, which he has done freely to Bill. As there is no exchange of money or other form of compensation, it does not qualify as a sale or exchange. This voluntary transfer of property from one person to another without compensation typically constitutes a gift in legal terms.