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that the charity actually will receive the use and benefit of the
gift, for which the deduction is claimed”), affd. 325 F.2d 934
(8th Cir. 1963).
I would deny a charitable deduction for the increased value
by applying to this case a public policy doctrine that is similar
to the doctrine applied by the Courts in Commissioner v. Procter,
142 F.2d 824, 827 (4th Cir. 1944), revg. on other grounds a
Memorandum Opinion of this Court, and Ward v. Commissioner,
87 T.C. 78 (1986). In Commissioner v. Procter, supra, the
taxpayer transferred certain property interests to a trust
benefiting his children. The trust instrument provided that, if
a competent Federal court of last resort should find any part of
the transfer to be subject to gift tax, then that portion of the
property subject to such tax would not be considered to have been
transferred to the trust. The Court of Appeals for the Fourth
Circuit declined to respect this adjustment provision. The court
stated:
We do not think that the gift tax can be avoided by any
such device as this. Taxpayer has made a present gift
of a future interest in property. He attempts to
provide that, if a federal court of last resort shall
hold the gift subject to gift tax, it shall be void as
to such part of the property given as is subject to the
tax. This is clearly a condition subsequent and void
because contrary to public policy. A contrary holding
would mean that upon a decision that the gift was
subject to tax, the court making such decision must
hold it not a gift and therefore not subject to tax.
Such holding, however, being made in a tax suit to
which the donees of the property are not parties, would
not be binding upon them and they might later enforce
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