Estate of Arthur A. Schmidt, Deceased, Marjorie Mosher Schmidt v. Commissioner of Internal Revenue

We are here reviewing a decision of The Tax Court, 19 T.C. 54 , by which the petitioner lost her claim for a redetermination of the estate tax. By agreement of the parties, there will be no dispute as to the sum of the correct tax, once it is decided whether a gift tax has been paid on certain gifts made to the decedent in 1946, thereby qualifying the gifts as property previously taxed and therefore deductible from decedent’s taxable estate under the provisions of § 812(c) of the Internal Revenue Code, Title 26 U.S.C.A. § 812 (c). All cita tions of applicable statutory law by section number refer to the Internal Revenue Code, Title 26 U.S.C.A.

A gift of stock was made to decedent in 1946 and the donor asserted her $3,000 annual exclusion (under § 1003(b) (3)) and part of her $30,000 specific exemption (under § 1004(a) (1)) with the-result that there was no gift tax on the transaction. The donor made another gift of stock to the same donee in 1947.

The donee died within a few weeks after the second gift and during the same year it was given. The stock of both gifts was intact at the time of the donee’s death and became a part of his estate. In due time, the executrix of…