Hutchings v. Commissioner

Memorandum Opinion

ARNOLD, Judge: This proceeding involves a deficiency in gift taxes for 1938 in the amount of $676.11. The deficiency resulted from respondent's determination that petitioner's net gifts for preceding years, for gift tax purposes, was $104,970.34, instead of $69,970.34 as reported by petitioner. The difference of $35,000 represented seven $5,000 exclusions claimed by petitioner in connection with gifts in trust made in 1935, and its right to said exclusions was being litigated at the time respondent determined the deficiency for 1938 here in dispute. The petitioner alleged error by respondent in his determination of the amount of net gifts for preceding years.

The facts are not in dispute. Petitioner made gifts in 1938 aggregating $82,843.13. She claimed and was allowed exclusions of $30,000, leaving net gifts for 1938 of $52,843.13. In determining total net gifts respondent added to net gifts for 1938 $104,970.34 representing net gifts for preceding years, which failed to take into account any $5,000 exclusions for 1935.

In Mary M. Hutchings, 1 T.C. 692,*426 we held that petitioner was entitled to no $5,000 exclusions for 1935. It follows from our determination of petitioner's 1935 gift tax liability that her net gifts for preceding years for the purposes of her 1938 gift tax liability will be $104,970.34, and the deficiency determined by respondent must be approved.

Decision will be entered for the respondent.