Cite as: 511 U. S. 224 (1994)
Opinion of the Court
phasized that this comprehensive language was chosen to embrace all gratuitous transfers, by whatever means, of property and property rights of significant value. See, e. g., Dickman v. Commissioner, 465 U. S. 330, 333-335 (1984); Jewett v. Commissioner, 455 U. S., at 309-310; Smith v. Shaughnessy, 318 U. S. 176, 180 (1943). We held in Jewett, supra, at 310, that "the statutory language . . . unquestionably encompasses an indirect transfer, effected by means of a disclaimer, of a contingent future interest in a trust," the practical effect of such a transfer being "to reduce the expected size of [the taxpayer's] taxable estate and to confer a gratuitous benefit upon the natural objects of [her] bounty . . . ."
Treasury Reg. § 25.2511-1(c)(1) 9 restates the gift tax's broad scope by providing that the tax is payable on "any transaction in which an interest in property is gratuitously passed or conferred upon another, regardless of the means or device employed . . . ." The Regulation (subsection 1(c)(2)), on the other hand, affords an exception to the general rule of taxability, by providing that a disclaimer of property transferred by a decedent's will or the law of descent and distribution does not result in a gift if it is unequivocal and effective under local law, and made "within a reasonable time after knowledge of the existence of the transfer." As
9 "The gift tax also applies to gifts indirectly made. Thus, any transaction in which an interest in property is gratuitously passed or conferred upon another, regardless of the means or device employed, constitutes a gift subject to tax. See further § 25.2512-8 relating to transfers for insufficient consideration. However, in the case of a taxable transfer creating an interest in the person disclaiming made after December 31, 1976, this paragraph (c)(1) shall not apply to the donee if, as a result of a qualified disclaimer by the donee, the property passes to a different donee. Nor shall it apply to a donor if, as a result of a qualified disclaimer by the donee, a completed transfer of an interest in property is not effected. See section 2518 and the corresponding regulations for rules relating to a qualified disclaimer." Treas. Reg. § 25.2511-1(c)(1), 26 CFR § 25.2511-1(c)(1) (1993).
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