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determining the value of gifts under section 2512(b). Under the
annual gift tax exclusion, the first $10,000 of gifts made to any
person is excluded from total taxable gifts. Unlike section
2512(b), section 2503(b) focuses on the identity of the donee.
Section 2503(b) specifically addresses “gifts * * * made to any
person” and excludes “the first $10,000 of such gifts to such
person”. In explaining the meaning of “gift” in the statute
providing for the annual exclusion, the Supreme Court explained:
But for present purposes it is of more importance
that in common understanding and in the common use of
language a gift is made to him upon whom the donor
bestows the benefit of his donation. One does not
speak of making a gift to a trust rather than to his
children who are its beneficiaries. The reports of the
committees of Congress used words in their natural
sense and in the sense in which we must take it they
were intended to be used in � 504(b) when, in
discussing � 501, they spoke of the beneficiary of a
gift upon trust as the person to whom the gift is
made.* * * Helvering v. Hutchings, 312 U.S. 393, 396
(1941).
The Supreme Court’s interpretation of the term “gift” for
purposes of the annual exclusion was based upon the common
meaning and understanding of the term gift. The Supreme Court’s
interpretation of the term gift in section 2503(b) must be
contrasted with the Supreme Court’s broad interpretation of
3(...continued)
of gifts (other than gifts of future interests in
property) made to any person by the donor during the
calendar year, the first $10,000 of such gifts to such
person shall not, for purposes of subsection (a), be
included in the total amount of gifts made during such
year. * * *
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