[Code of Federal Regulations]
[Title 26, Volume 14]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR25.2512-7]

[Page 548-549]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 25_GIFT TAX; GIFTS MADE AFTER DECEMBER 31, 1954--Table of Contents
 
Sec.  25.2512-7  Effect of excise tax.

    If jewelry, furs or other property, the purchase of which is subject 
to an excise tax, is purchased at retail by a taxpayer and made the 
subject of gifts within a reasonable time after purchase, the purchase 
price, including the excise tax, is considered to be the fair market 
value of the property on the date of the gift, in the absence of 
evidence that the market price of similar articles has increased or 
decreased in

[[Page 549]]

the meantime. Under other circumstances, the excise tax is taken into 
account in determining the fair market value of property to the extent, 
and only to the extent, that it affects the price at which the property 
would change hands between a willing buyer and a willing seller, as 
provided in Sec.  25.2512-1.