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to support this theory. Respondent argues that donative intent
is not a requirement for a taxable gift, citing section 2512(b):
Where property is transferred for less than an adequate
and full consideration in money or money's worth, then
the amount by which the value of the property exceeded
the value of the consideration shall be deemed a gift,
and shall be included in computing the amount of gifts
made during the calendar year.
Respondent reasons that since the evidence shows that no
consideration was given by Patricia Low for the cancellation of
the debt, the amount of the gift must equal the debt, citing
section 25.2512-8, Gift Tax Regs. Respondent is correct.
The gift tax regulations provide:
Transfers reached by the gift tax are not confined to
those only which, being without a valuable
consideration, accord with the common law concept of
gifts, but embrace as well sales, exchanges, and other
dispositions of property for a consideration to the
extent that the value of the property transferred by
the donor exceeds the value in money or money's worth
of the consideration given therefore. * * * [Sec.
25.2512-8, Gift Tax Regs.]
The Supreme Court has interpreted these provisions as
follows:
Congress chose not to require an ascertainment of what
too often is an elusive state of mind. For purposes of
the gift tax it not only dispensed with the test of
"donative intent". It formulated a much more workable
external test, that where "property is transferred for
less than an adequate and full consideration in money
or money's worth," the excess in such money value
"shall, for the purpose of the tax imposed by this
title, be deemed a gift . . ." And Treasury
Regulations have emphasized that common law
considerations were not embodied in the gift tax.
[Commissioner v. Wemyss, 324 U.S. 303, 306-307 (1945)
fn. ref. omitted.]
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