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from the gross estate for “all bequests, legacies, devises, or
gifts” to a qualifying recipient. (Emphasis added.)
The Revenue Act of 1921, ch. 136, sec. 403(a)(3), 42 Stat.
279, substituted for the word “gifts” the phrase “transfers,
except bona fide sales for a fair consideration in money or
money’s worth, in contemplation of or intended to take effect in
possession or enjoyment at or after the decedent’s death”. The
purpose of the 1921 amendment was to make “clear that gifts by
decedent during his lifetime for public, religious, charitable,
scientific, literary, educational, or other benevolent purposes
are not deductible where the value of the property given is not
required under the law to be included in * * * [the decedent’s]
gross estate.” S. Rept. 275, 67th Cong., 1st Sess. (1921), 1939-
1 C.B. (Part 2) 181, 199; see Senft v. United States, supra at
644-645.18 The effect of the 1921 amendment, then, was to
18 Before 1924, there was no gift tax. There was an estate
tax, however, and it required inclusion in the gross estate of
transfers “in contemplation of or intended to take effect in
possession or enjoyment at or after * * * [a decedent’s] death
* * *, except in case of a bona fide sale for a fair
consideration in money or money’s worth.” Revenue Act of 1918,
ch. 18, sec. 402(c), 40 Stat. 1097. This provision gave rise to
the wording of the 1921 amendment, as described in the text
above. In hearings before the Senate Committee on Finance,
Dr. T.S. Adams, tax advisor, U.S. Treasury Department, had
recommended the 1921 amendment, explaining its purpose as
follows:
[The 1918 Act authorizes] deductions on account of
bequests, legacies, devises, or gifts. That word
“gift” has been misused * * *; the only gifts which
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