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situated.” Sec. 2031(a). This does not mean, however, as the
estate implies, that each constituent element of the gross
estate, so defined, necessarily constitutes, depends upon, or
presupposes a separate and distinct “transfer” of property.8
Third, it is not meaningful to speak of “consideration”
received by decedent (or the estate) for payment of decedent’s
gift tax liabilities. “‘A consideration in its widest sense is
the reason, motive, or inducement, by which a man is moved to
bind himself by an agreement.’” Black’s Law Dictionary 301 (7th
ed. 1999) (quoting Salmond, Jurisprudence 359 (10th ed. 1947)).
Decedent’s obligation to pay gift taxes on his 1991 and 1992
gifts arose by operation of law and was unaffected by any
agreement he might have made with the donee children or anyone
else.9 Accordingly, any consideration he might have received in
connection with any such agreement was necessarily for something
8 For instance, as apropos of the case at hand and discussed
in greater detail infra, the gross estate includes the amount of
assets required to satisfy the estate tax liability even though
those assets are ultimately unavailable for transfer by the
decedent.
9 As the Supreme Court stated in Diedrich v. Commissioner,
457 U.S. 191, 197 (1982) (holding that the donor of a net gift
realizes taxable income to the extent the gift tax paid by the
donee exceeds the donor’s adjusted basis in the property given):
When a gift is made, the gift tax liability falls on
the donor under 26 U.S.C. � 2602(d). When a donor
makes a gift to a donee, a “debt” to the United States
* * * is incurred by the donor. Those taxes are as
much the legal obligation of the donor as the donor’s
income taxes * * * [Fn. ref. omitted.]
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