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the alleged difference between the fair market value of
decedent’s stock and the redemption price.
Section 2501(a) provides for a tax on gifts by individuals.
Section 2512(a) provides that the value of a gift of property at
the date of the gift shall be considered the amount of the gift.
Section 2512(b) provides:
SEC. 2512(b). Where property is transferred for
less than an adequate and full consideration in money
or money’s worth, then the amount by which the value of
the property exceeded the value of the consideration
shall be deemed a gift, and shall be included in
computing the amount of gifts made during the calendar
year.
If the value of the property given up by decedent exceeded
the value of the property she received, decedent made a gift for
the purposes of the Federal gift tax. The amount of any such
excess augmented the value of Nikita Maggos’ common stock in PCAB
and would be a taxable gift from decedent to Nikita. See Kincaid
v. United States, 682 F.2d 1220, 1224 (5th Cir. 1982); Tilton v.
Commissioner, 88 T.C. 590 (1987); sec. 25.2511-1(h)(1), Gift Tax
Regs.8
8Sec. 25.2511-1(h)(1), Gift Tax Regs., provides:
(h) The following are examples of transactions
resulting in taxable gifts and in each case it is
assumed that the transfers were not made for an
adequate and full consideration in money or money’s
worth:
(1) A transfer of property by a corporation to B
is a gift to B from the stockholders of the
(continued...)
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