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Sections 501 and 503 are not disparate provisions.
Congress directed them to the same purpose, and they
should not be separated in application. Had Congress
taxed “gifts” simpliciter, it would be appropriate to
assume that the term was used in its colloquial sense,
and a search for “donative intent” would be indicated.
But Congress intended to use the term “gifts” in its
broadest and most comprehensive sense. H. Rep. No.
708, 72d Cong., 1st Sess., p.27; S. Rep. No. 665, 72d
Cong., 1st Sess., p.39; cf. Smith v. Shaughnessy, 318
U.S. 176; Robinette v. Helvering, 318 U.S. 184.
Congress chose not to require an ascertainment of what
too often is an elusive state of mind. For purposes of
the gift tax it not only dispensed with the test of
“donative intent.” It formulated a much more workable
external test, that where “property is transferred for
less than an adequate and full consideration in money
or money’s worth,” the excess in such money value
“shall, for the purpose of the tax imposed by this
title, be deemed a gift...” And Treasury Regulations
have emphasized that common law considerations were not
embodied in the gift tax. [Commissioner v. Wemyss, 324
U.S. 303, 306 (1945); fn. ref. omitted.]
The Supreme Court described the objective of these statutory
provisions as follows:
The section taxing as gifts transfers that are not made
for “adequate and full [money] consideration” aims to
reach those transfers which are withdrawn from the
donor’s estate. * * * [Id. at 307.]
Under the applicable statutory provisions, it is unnecessary
to consider the value of what petitioner’s sons received in order
to determine the value of the property that was transferred.
Indeed, the regulations provide that it is not even necessary to
identify the donee.1 The regulations provide that the gift tax
1Sec. 25.2511-2(a), Gift Tax Regs.:
SEC. 25.2511-2. Cessation of donor’s dominion and
control. (a) The gift tax is not imposed upon the
receipt of the property by the donee, nor is it
necessarily determined by the measure of enrichment
(continued...)
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