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Pascarelli v. Commissioner

United States Tax Court (1971) | 1971 U.S. Tax Ct. LEXIS 164; 55 T.C. 1082

4 min read

TL;DR: A woman received substantial funds from her long-term romantic partner. The court determined the transfers were primarily gifts, not compensation for services, based on the transferor's donative intent. The recipient was consequently held liable as a transferee for the unpaid gift tax on these amounts.

Legal Significance: The case exemplifies the application of the Duberstein "detached and disinterested generosity" standard to distinguish gifts from taxable income in the context of a long-term personal relationship. It also affirms a donee's transferee liability for the donor's unpaid gift tax.

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