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intent), will be considered as made for an adequate and
full consideration in money or money's worth. * * *
Under that regulation, transfers of property reached by the gift
tax include transfers where (and to the extent) the value of the
property transferred by the donor exceeds the value in money or
money’s worth (cash value) of the consideration given in exchange
therefor.4 A presumption of full consideration arises, however,
in the case of a transfer of property made in the ordinary course
of business; i.e., a transfer that is “bona fide, at arm’s
length, and free from any donative intent”. Id. One consequence
of satisfying the ordinary-course-of-business test is that the
inquiry as to full consideration is avoided (and the actual fair
market value of the consideration given for the transferred
property is irrelevant).
B. Approach of the Majority
On pages 19-20 of its report, the majority makes the
following finding:
On December 28, 1996, decedent signed a letter
that was written by Mr. Fullmer and addressed to
4 As we have recently said: “The meaning of the phrase ‘in
money or money's worth’, when it follows ‘adequate and full
consideration’, has been interpreted to confine the scope of
‘consideration’ to money or its equivalent; i.e., to exclude a
mere promise or agreement as consideration.” Abeid v.
Commissioner, 122 T.C. 404, 409 n.7 (2004); see also sec.
25.2512-8, Gift Tax Regs. (“A consideration not reducible to a
value in money or money’s worth, as love and affection, promise
of marriage, etc., is to be wholly disregarded [in determining
adequate and full consideration], and the entire value of the
property transferred constitutes the amount of the gift.”).
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