Estate of Marie A. Bies - Page 11

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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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