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In determining the amount of the gross estate, the
amount of gift tax paid with respect to transfers made
within 3 years of death are [sic] to be includable in a
decedent’s gross estate. This “gross-up” rule for gift
taxes eliminates any incentive to make deathbed
transfers to remove an amount equal to the gift taxes
from the transfer tax base. [H. Rept. 94-1380, at 12,
14 (1976), 1976-3 C.B. (Vol. 3) 735, 746, 748.]
Citing this legislative history, the estate argues that the
gross-up rule of section 2035(c) is fundamentally different from
the 3-year rule of section 2035(a), which was held to be
constitutional in Estate of Rosenberg v. Commissioner, supra, and
Estate of Ekins v. Commissioner, supra. The estate contends
that, unlike the 3-year rule of section 2035(a), the gross-up
rule of section 2035(c) is not “prophylactic” but instead
“[ingrains] an element of motive with respect to gift tax paid on
lifetime transfers”, because “Congress based its enactment of
sec. 2035(c) upon the elimination of a tax avoidance technique by
deathbed gifts.” The result, the estate contends, is that
section 2035(c) “created a conclusive presumption regarding
motive, leaving taxpayers no opportunity to present evidence to
the contrary.” Therefore, the estate concludes, section 2035(c)
is unconstitutional under Heiner v. Donnan, 285 U.S. 312 (1932).
We disagree.
In Estate of Rosenberg v. Commissioner, 86 T.C. at 995-996,
this Court observed:
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