5
exclusions. Sec. 2503. Thus, lifetime gifts that do not give
rise to gift taxes at the time of the gift may increase the net
tax due from the estate of the donor by virtue of their being
included in the "adjusted taxable gifts" of the estate for
purposes of computing the estate tax. The first $10,000 of a
gift or gifts made to a donee in a calendar year shall not be
included in the total amount of gifts made during the year, but
gifts of future interests in property do not qualify for the
exclusion. Sec. 2503(b).
Under section 2001(e), if a decedent's spouse was the donor
of any gift, one-half of which was considered under section 2513
as made by decedent, and the whole amount of such gift is
includable in the gross estate of the decedent's spouse by reason
of section 2035, then such gift shall not be included in the
adjusted taxable gifts of decedent. Generally the gross estate
includes any transfers of property made by a decedent within the
3-year period ending on the date of death, section 2035(a), but
that rule has been substantially narrowed for decedents dying
after 1981. The general rule now does not apply to such
decedents unless within the 3-year period the decedent made a
transfer of an interest in property that is includable in the
estate under section 2036, 2037, 2038, or 2042, or would be
included under those sections had the interest been retained by
decedent. Sec. 2035(d). In the case at bar, no part of the gift
made in 1986 of the interest in real property owned by decedent's
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