Memorandum Findings of Fact and Opinion
LEECH, Judge: These consolidated cases involve gift tax liability for the calendar years 1937, 1938, 1939 and 1940 in the following amounts:
| Lottie | ||
| Year | S. P. Farish | Rice Farish |
| 1937 | $296.72 | $239.00 |
| 1938 | 411.30 | 359.90 |
| 1939 | 10.54 | 10.56 |
| 1940 | 38.25 | 38.25 |
The only issue is whether the respondent erroneously determined "prior net gifts" in computing the petitioners' gift tax liability for the calendar years in question.
[
The cases were submitted upon a stipulation of facts and exhibits which we adopt as our findings of fact. The petitioners, during the taxable years involved, were husband and wife residing in Houston, Texas. They filed their respective gift tax returns with the collector of internal revenue for the first district of Texas. The gifts made by the petitioners were from community property.
On March 23, 1938, respondent determined net gifts of the petitioner S. P. Farish for the year 1936 in the amount of $31,701.75. Subsequently this petitioner filed an amended1943 Tax Ct. Memo LEXIS 136">*137 gift tax return for the years 1936 showing net gifts of $32,405.29. In determining the gift tax liability of this petitioner for the calendar years involved, the respondent increased prior net gifts for the year 1936 from $32,405.25 to $60,828.81. The increase resulted from his disallowing, for the purpose of determining net prior gifts, exclusions of $20,000 and specific exemption of $8,423.56 which had been erroneously allowed in determining net gifts for the year 1936.
On March 23, 1938, respondent determined net gifts of the petitioner Lottie Rice Farish for 1936 in the amount of $35,128.24. An amended gift tax return was later filed showing net gifts of $36,831.74 for the year 1936. In determining the gift tax liability of this petitioner for the years now in question, the respondent increased prior net gifts for the year 1936 from $35,831.74 to $60,408.74. The increase resulted from his disallowing, for the purpose of determining net prior gifts, exclusions of $20,000 and specific exemption of $4,577 which had been erroneously allowed in determining net gifts for the year 1936.
Opinion
The petitioners contend that the three-year statute of limitations bars the respondent 1943 Tax Ct. Memo LEXIS 136">*138 from disregarding exclusions erroneously allowed in 1936, for the purpose of determining total net gifts in the current tax years. We have recently determined this question adversely to the petitioners' contention.
