Flournoy

The sole issue is whether the amount of federal gift tax paid upon the transfer of property in contemplation of death when said property subsequently becomes subject to federal and state inheritance taxes is deductible from the appraised value of the property to determine the “clear market value” upon which the state inheritance tax is determined under circumstances where the amount of the federal gift tax paid is credited against the amount of the federal estate tax.

The facts are stipulated (see Appendix A). The question is one of law,

*330 Shortly before his death, Antonio Giolitti transferred without, consideration virtually all of his property to his three children. The appraised market value of the transferred properties at the date of death was $453,586.86. It is stipulated the transfers were in contemplation of death (Rev. & Tax. Code, § 13642) 1 and they were subject to- both the state gift and inheritance taxes and the federal gift and estate taxes. Federal and state gift tax returns were prepared and filed subsequent to death and the amount of the federal gift tax fixed and paid was $82,603.93 and the State of California gift tax $14,924.71. The federal…