https://www.taxtmi.com/caselaws?id=57731 Gift-tax liability undertaken by the donee was not deductible in computing the taxable value of the gift because the deduction applies only to liabilities or encumbrances existing before the gift. The tax liability arises only on completion of the gift and is a consequence of the transfer, not a pre-existing burden on the property. The statutory scheme places primary liability on the donor, with recovery from the donee only in specified cases, and treats the tax as a first charge only after the gift is complete. A private agreement shifting the tax burden to the donee does not convert that post-transfer liability into a deductible encumbrance. en-us Thu, 01 Feb 1990 00:00:00 +0530 Mon, 13 Dec 2010 11:53:44 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=57731 Gift-tax liability undertaken by the donee was not deductible in computing the taxable value of the gift because the deduction applies only to liabilities or encumbrances existing before the gift. The tax liability arises only on completion of the gift and is a consequence of the transfer, not a pre-existing burden on the property. The statutory scheme places primary liability on the donor, with recovery from the donee only in specified cases, and treats the tax as a first charge only after the gift is complete. A private agreement shifting the tax burden to the donee does not convert that post-transfer liability into a deductible encumbrance. Case-Laws Income Tax Thu, 01 Feb 1990 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=57731