infinitybenzo

P238: Donee is the recipient of the gift. If the donee pays the transfer tax - then he is paying a tax on the inheritance received which would be the gift tax itself. and since both of these are paid when the gift is received - and it will be at the donee's tax rate - the future inheritance tax = gift tax.

P240 - Exhibit 6: gives an illustration.
couple transfers 100 mill to their child.

gift = 100
they have a 500 Mill estate.

if they bequest it to their child -> child gets 500 * (1-0.45) = 275

If they gift 100 Mill to their child - their estate reduces to 400 Mill. A further 45 Mill is reduced from that since they pay the gift tax. So 355 * (1-0.45) = 195 is what the child gets from estate. + gift of 100 Mill (on which child pays nothing) = 295 Mill.

295 > 275.

CP