J.C. Shepherd - Page 64




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          Gift Tax Regs., Robinette v. Helvering, 318 U.S. 184, 186 (1943),           
          and other cases therein); see also sec. 25.2512-8, Gift Tax Regs.           
               This is the “estate depletion” theory of the gift tax2,                
          given its most cogent expression by the Supreme Court in                    
          Commissioner v. Wemyss, 324 U.S. 303, 307-308 (1945):                       
               The section taxing as gifts transfers that are not made                
               for “adequate and full [money] consideration” aims to                  
               reach those transfers that are withdrawn from the                      
               donor’s estate.  To allow detriment to the donee to                    
               satisfy the requirement of “adequate and full                          
               consideration” would violate the purpose of the statute                
               and open wide the door for evasion of the gift tax.                    
               See 2 Paul, supra [Federal Estate and Gift Taxation                    
               (1942)] at 1114.3                                                      

               The logic and the sense of the estate depletion theory                 
          require that a donor’s simultaneous or contemporaneous gifts to             
          or for the objects of his bounty be unitized for the purpose of             


               2 See, e.g., Lowndes et al., Federal Estate and Gift Taxes             
          356 (1974); Solomon et al., Federal Taxation of Estates, Trusts             
          and Gifts 191 (1989).                                                       
               3 The Paul treatise, cited twice with approval in                      
          Commissioner v. Wemyss, 324 U.S. 307, 308 (1948), put it this               
          way:                                                                        
                    It is Congress’s intention to reach donative                      
               transfers which diminish the taxpayer’s estate.  The                   
               existence of “an adequate and full consideration in                    
               money or money’s worth” which is not received by the                   
               taxpayer has that very same effect.  Since the section                 
               is aimed essentially at “colorable family contracts and                
               similar undertakings made as a cloak to cover gifts,”                  
               it is fair to assume that Congress intended to exempt                  
               transfers only to the extent that the taxpayer’s estate                
               is simultaneously replenished. The consideration may                   
               thus augment his estate, give him a new right or                       
               privilege, or discharge him from liability.  [2 Paul,                  
               Federal Estate and Gift Taxation, 1114-1115 (1942);                    
               citations omitted.]                                                    


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