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E. Family Gift Giving and Business Financing Practices
Dave and Jean True made gifts to some or all of their
children (and their children’s spouses) every year but one
between 1955 and 1993; gifts were not made in 1984 due to the
oversight of an in-house accountant-bookkeeper. They gave cash
or ownership interests in various True companies valued at the
maximum allowable amount that would not trigger gift tax (except
for 1973, the only year in which taxable gifts occurred).
When the True children were minors, the gifts were
administered through a guardianship arrangement established by
Dave True, as guardian. In later years, cash gifts to True
children and their spouses were deposited into business bank
accounts that were separately designated by recipient. Gifts to
a spouse were first lent to the True child, and then those
combined funds were invested in the True companies, either by
purchasing ownership interests or by making interest-bearing
loans, or both. The True companies’ bookkeepers maintained
detailed records of these transactions.
The True children and their spouses never received their
gifts as cash in hand; however, the donees were generally aware
that their gifts were being invested on their behalf. They had
no specific knowledge of how or when they acquired their earliest
interests in the True companies.
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