In this well known scene from The Shawshank Redeption (content warning: language), Hadley is complaining because he is getting an inheritance, but he knows that the IRS is going to take a bunch of it in taxes. Andy tells him that if he trusts his wife, then he can keep the full amount by giving it to her. His explanation is that the IRS allows a "one-time only gift to your spouse for up to $60,000", tax free.
This scene never made sense to me. I've heard of gift taxes; and how gift below a certain amount are not taxed. But wouldn't this only mean that there is no additional gift tax that would need to be paid for giving the money to someone? Wouldn't the money he received still be taxed as inherited money; unrelated to what he then chose to do with the money (give it away, spend it, etc)?
Is this simply something made up by the movie (or maybe the book; I don't know if this dialog comes from the book or not)? Or is there some sense to it, such as maybe him being allowed to deduct the money he gave away, similar to if he had given it to a charity?
Is this something where the laws may have been different in the 1940s from today?