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higher rate, regardless of the amount transferred in the current year. Owing to the graduated tax rates and to the variations in the amounts of exclusions, deductions, and specific exemption taken, and in the amount of aggregate net gifts since June 6, 1932, donors making gifts of equal amounts in the current year may have different tax liabilities; or one may have a tax liability and the other no tax liability.

Prior years, in reference to gift tax tabulations, apply to the interval of years between the inception of the present period of gift taxation, June 6, 1932, and the current year.

Net gifts for prior years are the aggregate net gifts transferred since June 6, 1932, exclusive of the current year gifts. The amount of net: gifts for prior years is reported by the donor in schedule B on the current return. The amount reported in this schedule may exceed the actual net gifts for those years, for the reason that, if more than $30,000 specific exemption was taken before 1943 when a larger exemption was allowable, the net gifts for preceding years are increased by an amount equal to the excess, for the purpose of computing the gift tax liability in the current year.

Tax on net gifts for prior years is a tax computed on the aggregate net gifts for preceding years (as reported in schedule B) and may not be the actual gift tax reported for those years because it is computed at current tax rates on aggregate net gifts for prior years adjusted to include an amount equal to the specific exemption in excess of $30,000 taken prior to 1943.

CLASSIFICATION OF GIFT TAX RETURNS

Gift tax returns are classified as taxable and nontaxable returns.' Taxable returns show net gifts and are further classified by size of net gifts and by size of total gift plus tax. Nontaxable returns show no net gifts and are classified by size of total gifts. Identical donors are distinguished from other donors. The taxable returns of identical donors that show a tax on prior year gifts are classified by size of the aggregate net gifts for prior years. Data are presented by these classifications in the gift tax tables; but not all items are available for every classification.

Taxable and nontaxable returns.-Returns are classified as taxable and nontaxable for the current year, based on the existence or nonexistence of gift tax liability for 1948. Taxable returns show net gifts; nontaxable returns show no net gifts. Tax status for prior years is determined from the tax (or no tax) on net gifts for preceding years, reported in the tax schedule for the purpose of computing the current year gift tax.

Net gift classes.-Taxable gift tax returns are segregated into net gift classes based on the amount of net gifts for the current year.

Total gift plus tax classes.-Taxable gift tax returns are segregated into total gift plus tax classes based on the sum of total gifts before exclusions and the gift tax for the current year. (Classification on this basis is more nearly comparable with the size classification of gross estate in tables for estate tax returns, because that classification is based on an amount which included the tax payment.)

Total gift classes.-Nontaxable gift tax returns are segregated into total gift classes according to the amount of total gifts before exclusions.

individual who made gifts to a donee other than charitable, public, and similar organizations both in the current year and in one or more prior years. Identical donors are identified from data on the current year returns. Schedule B shows the net gifts for, and specific exemption taken in, prior years. From these data, it can be determined whether the prior year gifts were made to donees other than charitable organizations. If husband and wife consent to divide gifts between them in the current year, each is considered a donor of his or her respective total gifts for the year (that is, before exclusions), the amount of which includes gifts transferred from the return of the spouse as a result of mutual consent.

Net gift for prior years classes.-Returns of identical donors which show a tax for 1948 and also a tax on gifts for prior years are segregated into net gift for prior years classes based on the amount of aggregate net gifts for prior years as adjusted in schedule B on the current year return to include the amount in excess of $30,000 specific exemption taken before 1943.

IDENTICAL DONORS

Among the 26,200 gift tax returns for 1948, there are 8,324 returns filed by individuals classified as identical donors. These donors made gifts to donees other than charitable organizations in the current year and also in a prior year. Of these 8,324 identical donors, 3,574 are nontaxable for 1948 although 315 report a tax on prior year gifts; and 4,750 donors are taxable for 1948, of whom 1,144 are taxable for the first time. These 4,750 taxable returns constitute 72.4 percent of the 6,559 taxable returns filed for 1948.

The gift tax liability of the 1,144 identical donors paying gift tax for the first time is $2,644,000; and the effective tax rate is 11.3 percent. Gift tax liability of the 3,606 identical donors, who previously have paid gift tax, is $34,776,000 with an effective tax rate of 26.7 percent. The effective rate of 26.7 percent for identical donors who previously paid gift tax indicates the effect of the progressive tax rate method when compared with the 11.3 percent effective tax rate for identical donors who are taxed for the first time.

TABULATED DATA

Data for gift tax returns for 1948 are presented in five gift tax tables and a sixth shows the number of returns, total gifts, net gifts, and tax for 1932 through 1948. Tables 1, 2, and 3 include all gift tax returns, taxable and nontaxable. In table 1, taxable returns are tabulated by net gift classes and nontaxable returns are in aggregate; in table 2, taxable returns are distributed by total gift plus tax classes and nontaxable returns are distributed by total gift classes. In table 3, types of property transferred by gift are shown in aggregate and also whether transferred in trust or otherwise, together with a frequency for each type of property transferred. Frequencies in this table denote the occurrence of gifts as reported by the original donor in schedule A, before division of gifts between spouses. Tables 4 and 5 present data only from the returns of identical donors. Certain information from these returns is tabulated in table 4, by the taxable status for 1948 and for prior years. A frequency distribution of identical donor returns which are taxable both for the current year and for prior years is tabulated in table 5, by size of net gifts for 1948

GIFT TAX TABLES

1. Number of returns, total gifts by types of property, exclusions,

total gifts before and after exclusions, deductions, net gifts, and tax-taxable returns by net gift classes and nontaxable returns in aggregate.

2. Number of returns, total gifts, total gifts before and after exclusions, exclusions, deductions, net gifts, and tax-taxable returns by total gift plus tax classes and nontaxable returns by total gift classes.

3. Value of gifts transferred in trust and of gifts otherwise transferred with corresponding frequency and percentage distributions-by types of property.

4. Number of returns for identical donors, total gifts after exclusions, deductions, net gifts, and tax-by taxable status.

5. Frequency distribution of taxable returns for identical donors who reported taxable gifts for prior years-by net gift classes and by net gift for prior years classes.

6. Number of returns, total gifts before exclusions, net gifts, and tax,

1932-48.

TABLE 1.-Gift tax returns for 1948, taxable returns by net gift classes and nontaxable returns in aggregate: Number of returns, total gifts by types of property, exclusions, total gifts after exclusions, deductions, net gifts, and tax

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