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H. Rept. 708, 72d Cong., 1st Sess. (1932), 1939-1 C.B.
(Part 2) 457, 476-477; S. Rept. 665, 72d Cong., 1st Sess.
(1932), 1939-1 C.B. (Part 2) 496, 524.
Petitioner's principal argument is based on the
proposition that there is a fundamental difference between
the valuation of property under section 2512(a) and section
2512(b). According to petitioner, section 2512(a) applies
to a "direct gift"; that is, a transfer in which the donor
"makes a gift of property and receives nothing back or
receives back some part of which he owned when he made the
transfer." On the other hand, section 2512(b) applies to
transactions involving "the transfer of property where the
property rights received in the exchange are different in
whole or in part from those given up." Petitioner's brief
summarizes this distinction as follows:
In short, a transfer that involves
relinquishing property with a bundle of rights
and receiving back the same property with the
bundle of rights reduced is a direct gift with
the value of the rights transferred determined
under I.R.C. �2512(a). Where a transfer involves
relinquishing property with a bundle of rights
and receiving some of those rights back, plus
others, or totally different rights, the issue
of "money's worth" comes up and the valuation
is under I.R.C. �2512(b).
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