[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: 26CFR25.2524-1]

[Page 625-626]
 
                       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.  25.2524-1  Extent of deductions.

    Under the provisions of section 2524, the charitable deduction 
provided for in section 2522 and the marital deduction provided for in 
section 2523 are allowable only to the extent that the gifts, with 
respect to which those deductions are authorized, are included in the 
``total amount of gifts'' made during the ``calendar period'' (as 
defined in Sec.  25.2502-1(c)(1)), computed as provided in section 2503 
and Sec.  25.2503-1 (i.e., the total gifts less exclusions). The 
following examples (in both of which it is assumed that the donor has 
previously utilized his entire $30,000 specific exemption provided by 
section 2521, which was in effect at the time) illustrate the 
application of the provisions of this section:

    Example (1). A donor made transfers by gift to his spouse of $5,000 
cash on January 1, 1971, and $1,000 cash on April 5, 1971. The donor 
made no other transfers during 1971. The first $3,000 of such gifts for 
the calendar year is excluded under the provisions of section 2503(b) in 
determining the ``total amount of gifts'' made during the first calendar 
quarter of 1971. The marital deduction for the first calendar quarter of 
$2,500 (one-half of $5,000) otherwise allowable is limited by section 
2524 to $2,000. The amount of taxable gifts is zero ($5,000-$3,000 
(annual exclusion) --$2,000 (marital deduction)). For the second 
calendar quarter of 1971, the marital deduction is $500 (one-half of 
$1,000); the amount excluded under section 2503(b) is zero because the 
entire $3,000 annual exclusion was applied against the gift in the first 
calendar quarter of 1971; and the amount of taxable gifts is $500 
($1,000-$500 (marital deduction)).
    Example (2). The only gifts made by a donor to his spouse during 
calendar year 1969 were a gift of $2,400 in May and a gift of $3,000 in

[[Page 626]]

August. The first $3,000 of such gifts is excluded under the provisions 
of section 2503(b) in determining the ``total amount of gifts'' made 
during the calendar year. The marital deduction for 1969 of $2,700 (one-
half of $2,400 plus one-half $3,000) otherwise allowable is limited by 
section 2524 to $2,400. The amount of taxable gifts is zero ($5,400-
$3,000 (annual exclusion) -$2,400 (marital deduction)).

[T.D. 7238, 37 FR 28734, Dec. 29, 1972, as amended by T.D. 7910, 48 FR 
40375, Sept. 7, 1983]

                        Deductions Prior to 1982