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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reach those transfers that are withdrawn from the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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