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strictly by self-interest and are free from donative intent.
They have agreed to form a partnership that they believe will
serve as a vehicle for the delivery of F’s property to them and
their children through a process whereby the transfer tax cost of
the delivery will be substantially reduced through various
valuation discounts. They agree to suffer a temporary loss of
independence and control (and perhaps some loss of fair market
value) in order to facilitate the reduction of transfer tax, the
burden of which ultimately would fall on them. For them, the
transfers are motivated by an acquisitive motive, not a donative
motive. They make no gifts because they are deemed to have
received full value under the ordinary-course-of-business test
found in section 25.2512-8, Gift Tax Regs.
So long as it can be shown that F’s contribution was not
free of donative intent, the result is different for F. F’s
purpose (not necessarily his sole purpose, but an important one)
is to pass his property to his family with a reduction in
transfer tax cost that translates dollar for dollar into an
enhancement of the net value that the family will receive. F
cannot, therefore, pass the ordinary-course-of-business test in
section 25.2512-8, Gift Tax Regs., and, because of the valuation
discounts claimed, cannot show full consideration. F, therefore,
has made gifts within the meaning of section 2512 and section
25.2512-8, Gift Tax Regs. The measure of the gifts is not the
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