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2041”.6 Section 2035(c) (unlike section 2035(a), for example),
does not describe a “transfer” but merely requires that the gross
estate be grossed up by the amount of gift taxes paid on gifts
made within 3 years of the decedent’s death.7
The estate suggests that even though section 2035(c) does
not explicitly refer to a “transfer”, it nevertheless must be
understood to describe a “transfer” so as to implicate section
2043(a). After all, the estate observes, the estate tax is a tax
on the privilege of transfer. Section 2035(c) requires payments
of certain gift taxes to be included in the gross estate, the
estate says. Therefore, the estate concludes, section 2035(c),
in describing these gift tax payments, must describe “transfers”
within the meaning of section 2043(a). We disagree.
6 Sec. 2043(a) provides:
SEC. 2043(a). In General.–-If any one of the
transfers, trusts, interests, rights, or powers
enumerated and described in sections 2035 to 2038,
inclusive, and section 2041 is made, created,
exercised, or relinquished for a consideration in money
or money’s worth, but is not a bona fide sale for an
adequate and full consideration in money or money’s
worth, there shall be included in the gross estate only
the excess of the fair market value at the time of
death of the property otherwise to be included on
account of such transaction, over the value of the
consideration received therefor by the decedent.
7 As discussed in more detail infra, this gross-up rule
functions to eliminate certain disparities in the tax treatment
of deathtime and lifetime transfers.
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