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B. Broad Definition of "Taxable Gift"
The Federal gift tax applies to "the transfer of property by
gift" by any individual. Sec. 2501(a).
Section 2503 defines the amount of an individual's "taxable
gifts". Under that section, an individual's taxable gifts for
any gift tax period means the total amount of "gifts" made during
that period, less certain deductions and exclusions not relevant
here (other than the $3,000 or $10,000 annual exclusion for gifts
to any individual, set forth in section 2503(b)).
The terms "gift" and "the transfer of property by gift"
cover a wide range of transactions. In Commissioner v. Wemyss,
324 U.S. 303, 306 (1945), the Supreme Court laid down the
principle that Congress intended to use the term "gifts" in its
broadest and most comprehensive sense. The Supreme Court in
Wemyss noted the "evident desire of Congress to hit all the
protean arrangements which the wit of man can devise that are not
business transactions within the meaning of ordinary speech".
Id. The Court in Wemyss also stated that donative intent on the
part of the transferor is not an essential element in the
application of the gift tax to a transfer of property. See id.
The gift tax provisions of the Code evince--and the gift tax
regulations promulgated thereunder carry out--this congressional
intent to apply the gift tax to a broad range of transactions.
See sec. 2512(b); sec. 25.2511-1(g)(1), Gift Tax Regs. Section
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