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petitioner retained a tax attorney to advise him in his work as
personal representative of decedent's estate. The tax attorney
discussed the transfers with petitioner, concluded that the
transfers were gifts, and prepared gift tax returns. Petitioner
and decedent's other personal representative signed both returns
and filed them with the Internal Revenue Service in April 1993.
Decedent's personal representatives reported on decedent's
estate tax return that she had a gross estate of $869,391.85.
II. OPINION
A. Whether Decedent Made Taxable Gifts in 1980 and 1983 When
She Transferred Undivided One-half Interests in Timberland
to Petitioner
1. Background and Contentions of the Parties
Respondent determined and contends that decedent's transfers
of undivided one-half interests in timberland to petitioner in
1980 and 1983 were taxable gifts. Petitioners contend that
decedent made the transfers in the ordinary course of business to
compensate petitioner for his many years of work for her and that
decedent lacked donative intent.
A transfer of property is not a taxable gift if it is made
in the ordinary course of business (i.e., is bona fide, at arm's
length, and without donative intent), even if the transfer is for
less than adequate and full consideration. Estate of Anderson v.
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