Estate of Catherine E. Dowell, Deceased, Patricia Low, Executrix - Page 29

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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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