In the case of a deficiency donor's tax, who is required to pay if the property is already in the donee's possession?

In the situation of a deficiency donor's tax where the property has already been transferred to the donee, the responsibility for payment lies with the donor. This is rooted in the principle that the donor is the one who initiated the gift and, thereby, is also accountable for any associated tax obligations arising from that gift, including any deficiencies.

The donee, having received the property, is not liable for the donor's tax as it is administered based on the donor's activities during the gifting process. The law generally treats the donor as the taxpayer for this type of liability. Therefore, if there is a deficiency—meaning that the amount of tax owed exceeds what has been paid—it falls upon the donor, even if the property is now in the donee's possession.

This understanding highlights the important distinction in the tax implications surrounding gifts and emphasizes that the original transferor retains responsibility for the tax, irrespective of the status of the property. Through this framework, the obligation concerning deficiency donor's tax is clearly assigned to the donor, reflecting the intention of tax law in such matters.