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Section 2511(a) requires consideration of whether decedent
made indirect transfers. Accordingly, we must decide whether
Gayle, Loretta, and Cheryl were merely intermediate recipients of
decedent's indirect transfers of stock to Albert, Gregory, and
James, respectively, or were the intended beneficiaries of
decedent's bounty. See Heyen v. United States, supra at 362;
Estate of Cidulka v. Commissioner, supra.
We consider the objective facts of the transfers and the
circumstances under which they were made evidence of decedent's
actual intent in making the stock transfers. See United States
v. Estate of Grace, 395 U.S. 316, 323 (1969); Heyen v. United
States, supra at 362-363; sec. 25.2511-1(g)(1), Gift Tax Regs.
The evidence shows that the simultaneous transfers were all part
of a prearranged single transaction.
It is clear that decedent arranged to give annually to each
recipient the number of MBI shares that would avoid imposition of
the gift tax. This fact, by itself, is not evidence of an
ulterior purpose in making the stock transfers to Gayle, Loretta,
and Cheryl. See Gregory v. Helvering, supra at 469 ("The legal
right of a taxpayer to decrease the amount of what otherwise
would be his taxes, or altogether avoid them, by means which the
law permits, cannot be doubted."). However, it is also clear
from the record that Gayle, Loretta, and Cheryl had preexisting
agreements to transfer the shares to their husbands. Mr. Grayson
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