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Sec. 25.2512-8, Gift Tax Regs.; see also Estate of Trenchard v.
Commissioner, T.C. Memo. 1995-121. As stated by the Supreme
Court, the "Congress intended to use the term 'gifts' in its
broadest and most comprehensive sense" and "dispensed with the
test of 'donative intent'" in lieu of "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 purposes of the tax
imposed by this title, be deemed a gift'". Commissioner v.
Wemyss, 324 U.S. 303, 306 (1945); see also Crown v. Commissioner,
585 F.2d 234, 238 (7th Cir. 1978), affg. 67 T.C. 1060 (1977).
The Federal gift tax provisions, however, do not reach all
transfers of property the value of which exceeds the
consideration received in exchange. The Federal gift tax does
not attach to a transfer of property which is made in the
ordinary course of business. Sec. 25.2512-8, Gift Tax Regs. For
this purpose, a transfer is in the ordinary course of business
only when it is bona fide, at arm's length, and free from
donative intent. Id.
This and other Courts look to a number of factors to help
ascertain whether a transfer is a gift under section 25.2512-8,
Gift Tax Regs. See Saltzman v. Commissioner, T.C. Memo. 1994-
641. For example, disparities in value evidence a gift, Fehrs v.
United States, 223 Ct. Cl. 488, 620 F.2d 255 (1980); see Kincaid
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