- 36 -
observed: “The word ‘gifts’ as used in the 1918 Act and the word
‘transfers’ used in later revenue acts have been construed in
their setting by the Supreme Court of the United States and given
identical effect.” Senft v. United States, 319 F.2d at 645
(citing Taft v. Commissioner, 304 U.S. at 358, and YMCA v. Davis,
264 U.S. 47, 50 (1924)).
Clearly, the payments of decedent’s Federal gift taxes,
either during his lifetime or after his death, do not represent
donative transfers, nor were they for exclusively public
purposes. Accordingly, the estate is entitled to no deduction
under section 2055(a) for the gift tax payments.
The estate acknowledges that “allowing a charitable
deduction would frustrate the intent of Congress in enacting
section 2035(c)” by effectively negating the effect of the gross-
up rule. The estate suggests, however, that Congress must have
intended this peculiar distortion of the statutory framework, as
demonstrated by its failure to make “conforming provisions” to
section 2055(a) when it enacted section 2035(c). We disagree.
The simpler explanation is that the estate’s interpretation of
section 2055(a) has long been understood to be incorrect.
19(...continued)
death. See H. Rept. 1, 69th Cong., 1st Sess. (1925), 1939-1 C.B.
(Part 2) 315, 325.
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