§1310

Accordingly, we hold that the exception to the characterization of a rental activity as a passive activity found in the regulation above is not applicable in this case.

v. Commissioner, 17 T.C. 1350, 1357 (1952). Such a gift is commonly referred to as a "net gift". B. Section 2035(b) "Gross-Up" Provision Under section 2035(b) (formerly section 2035(c), amended by the Taxpayer ReliefAct of 1997, Pub. L. No. 105-34, sec. 1310(a), 111 Stat. at 1043) a decedent's gross estate is increased by the amount ofany gift tax paid by the decedent or the decedent's estate on any gift made by the decedent during the three-yearperiod preceding the decedent's death. For purpose

1310(a), 111 Stat. at 1043), a decedent's gross estate is increased by the amount ofany gift tax paid by the decedent or the decedent's estate on any gift made by the decedent during the three-year period preceding the decedent's death. For purposes ofthis "gross-up" provision, we have deemed that the phrase "gift tax paid by the decedent or t