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a period of time, the amounts so forgiven would have constituted
a transfer by gift for Federal gift tax purposes. See Estate of
Kelley v. Commissioner, 63 T.C. at 326. Although petitioner
treated each of the transfers at issue as a loan, and not as a
gift, for Federal gift tax purposes, she did not consistently
report as gifts for Federal gift tax purposes the amounts for-
given in excess of $10,000 that were stated in the forgiveness
letters to Stephen and to Robert.14 See, e.g., Zimmerman v.
United States, 318 F.2d at 613; cf. Estate of Kelley v. Commis-
sioner, supra at 323. By way of illustration, petitioner did not
file Federal gift tax returns for any of the years 1984 through
1986. However, in each of those years, petitioner wrote forgive-
ness letters addressed to each of her sons in which she indicated
that $15,000 was the amount forgiven.
For the years 1987 and 1988, petitioner filed Federal gift
tax returns in which she reported as forgiveness of indebtedness
and thus as gifts amounts that were different from the amounts
forgiven that were stated in the forgiveness letters to Stephen
and/or to Robert for those years. For example, with respect to
14 In the case of a transfer by gift, a Federal gift tax return
must be filed unless the dollar amount transferred to each donee
is $10,000 or less and is thus excluded under sec. 2503(b), the
transfer is excluded as a qualified educational or medical
expense under sec. 2503(e), or the transfer is to a spouse for
which a deduction is allowed under sec. 2523. Sec. 6019(a).
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