Back about a month ago we wrote about the gift tax case of the Estate of Edward Redstone where the Tax Court found that, due to litigation with his father, a transfer in trust for his children was not a taxable gift.  The Court found the transfer had been for full and adequate consideration due to the issues related to the litigation and it did not matter the children had not provided such consideration.

Edward's brother Sumner also transferred shares to trust around the same time and, again, the IRS raised the gift issue.  But this time the results would be different.

The summer of 1972 had the break-in at the Watergate office complex in Washington DC on June 17.  While that event is now the subject of history books, an event that took place just over a month later just recently was the featured issue in tax litigation.  In the case of Estate of Redstone v. Commissioner, 145 TC No. 11 the issue became whether or not a gift had taken place back in 1972, a gift the IRS now sought to collect gift tax on.  Since no gift tax return had been filed, the statute remained open for the IRS to assess and attempt to collect the tax it claimed was due.