dissenting: The idea of a tax upon a tax is repellent initially. Here, in addition to the price of the ring of $58,000, the decedent paid $5,800, or 10 per cent of the price, to the retailer to cover the Federal excise tax. In addition, under the determination of respondent and under the holding of the majority opinion, the estate of the decedent must pay a Federal gift tax upon that same $5,800, as representing part of the value of the ring. Such a duplication is to be avoided unless required by express statutory words. United States v. Supplee-Biddle Hardware Co., 265 U. S. 189.
There is nothing in the statutes, or even in the regulations, which requires the result reached here. As noted in the majority opinion, in valuing property for gift tax purposes, section 86.19 (a) of Regulations 108 provides that the “value of the property is the price at which such property would change hands between a willing buyer and a willing seller * * *.” (Italics supplied.) Here the price of the ring was $58,000. Indeed, if that was not the price, one may well ask, On what was the tax of $5,800 computed? That price is the best indication we have of the fair market value of the ring. Had the ring been received by the decedent by inheritance, and he had then given it to his wife, and the same ring was, at the time of gift, being listed by retailers at a price of $58,000, plus excise tax, without doubt a jeweler would have appraised the ring received by inheritance at a fair market value of $58,000. We are only fixing the value of the ring itself, which is all that the wife received, not the amount the decedent was out of pocket in obtaining the ring. Believing that the price and hence the fair market value of the ring given by the decedent was $58,000,1 respectfully dissent from the holding of the maj ority.
Arundell, Yan Fossan, Arnold, and Harron, JJ., agree with this dissent.