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restrict the types of gifts for which a deduction from the gross
estate was allowed, rather than to allow a deduction for
nondonative transfers.
Since 1921, all versions of section 2055(a) and its
predecessors have referred to “bequests, legacies, devises, or
transfers”.19 As the Court of Appeals for the Third Circuit has
18(...continued)
should be affected are gifts in contemplation of death.
Therefore, the only gifts which should be deducted are
gifts in contemplation of death. * * *
* * * * * * *
The thought is this: Why should you give a man a
deduction from the gross estate of gifts? What kind of
gifts do you mean? The only gift that should go in
there is a gift that is taxable.
* * * * * * *
The wording follows the designation of the kind of
gift, as shown in the statute. You should use the same
language. [Hearings on H.R. 8245 Before the Senate
Comm. on Finance, 67th Cong., 1st Sess. 287 (1921)].
19 In 1926, the phrase that until then had followed
“transfers”–-namely, “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”–-was deleted. At the same time, a new
limitation was added in the same paragraph, providing: “The
amount of the deduction under this paragraph for any transfer
shall not exceed the value of the transferred property required
to be included in the gross estate”. Revenue Act of 1926, ch.
27, sec. 303(a)(3), 44 Stat. 72. (This limitation survives
almost verbatim in current sec. 2055(d).) These 1926 amendments
were in the nature of conforming amendments occasioned by a
provision of the same act modifying the definition of the gross
estate so as to include all transfers made within 2 years of the
decedent’s death regardless of whether made in contemplation of
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