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III. Caselaw Development
The foregoing statutory and regulatory pronouncements have
been the subject of repeated interpretation by the Federal
courts. Much of the litigation has occurred in the factual
context of gifts in trust, including a series of seminal
decisions by the Supreme Court in the 1940s. Commissioner v.
Disston, 325 U.S. 442 (1945); Fondren v. Commissioner, 324 U.S.
18 (1945); Ryerson v. United States, 312 U.S. 405 (1941); United
States v. Pelzer, 312 U.S. 399 (1941); Helvering v. Hutchings,
312 U.S. 393 (1941); see also Calder v. Commissioner, 85 T.C. 713
(1985); Blasdel v. Commissioner, 58 T.C. 1014 (1972), affd. 478
F.2d 226 (5th Cir. 1973). Additionally, parallel to the
developments in the trust area and incorporating many of the same
principles, a line of cases has addressed the related situation
where transfers of property are made to an entity with
preexisting interest-holders. See, e.g., Stinson Estate v.
United States, 214 F.3d 846 (7th Cir. 2000); Chanin v. United
States, 183 Ct. Cl. 840, 393 F.2d 972 (1968).
In both scenarios, the gift in question takes the form of an
indirect gift of the underlying property to the beneficiaries of
the trust or to those holding interests in the entity. Helvering
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