Contingencies and the Gift Tax

Posted: 7 Nov 2001

See all articles by Wendy C. Gerzog

Wendy C. Gerzog

University of Baltimore - School of Law

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With the gift tax serving only as a backstop for the income tax in the event of estate tax repeal, Congress needs to reexamine current distinctions between complete and incomplete gifts. Otherwise, in 2010, lifetime transfers will be taxed more severely than testamentary ones even where they are virtually indistinguishable in terms of retained control. The best solution is, of course, to eliminate estate tax repeal; however, if estate tax repeal does in fact occur, all attempted gifts should be treated as completed gifts of the full value of the underlying property. By serving as a prepayment of income tax in this way, the gift tax would more effectively serve its sole remaining purpose. It would also eliminate the need for both the grantor trust rules (excepting perhaps section 676) and the newly enacted section 2511(c).

Suggested Citation

Gerzog, Wendy C., Contingencies and the Gift Tax. Tax Notes, Vol. 93, No. 7, November 12, 2001. Available at SSRN:

Wendy C. Gerzog (Contact Author)

University of Baltimore - School of Law ( email )

1420 N. Charles Street
Baltimore, MD 21218
United States
410-837-4522 (Phone)

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