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property made by a donor to any person in a calendar year is
excluded from taxable gifts. See sec. 2503(b).
As a general rule, we will respect the form of a
transaction. We will not apply the substance over form
principles unless the circumstances so warrant. See Gregory v.
Helvering, 293 U.S. 465 (1935); Estate of Jalkut v. Commissioner,
96 T.C. 675, 686 (1991). Courts have applied the substance over
form principles in gift tax cases to determine the real donee and
value of the property transferred. See, e.g., Heyen v. United
States, 945 F.2d 359, 363 (10th Cir. 1991); Estate of Cidulka v.
Commissioner, T.C. Memo. 1996-149. In these cases, the indirect
transfers of the property to the intended donees were the result
of a prearranged plan. See, e.g., Heyen v. United States, supra
at 361 (donor transferred stock to 29 straws who either did not
know they were receiving stock or believed that they were
participating in stock transfers or had agreed before receiving
the stock to its retransfer, 27 of whom then retransferred the
stock to the donor's intended donees); Estate of Cidulka v.
Commissioner, supra (father's 14 transfers of stock to daughter-
in-law, who, on the same day, transferred the stock to her
husband, provided "inference" of an "understanding" between
father and daughter-in-law that her shares would be merely a
pass-through of shares to her husband).
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