1935 BTA LEXIS 724 | B.T.A. | 1935
Lead Opinion
opinion.
The respondent determined a deficiency of $11,552.16 in petitioner’s income tax for 1931. The only point upon which the petitioner assails the deficiency is that her gross income may not include $60,000 received by her from a trust fund set up by her former husband before the two were divorced. The facts are stipulated.
Petitioner and Irving T. Bush were formerly married. In May 1930 each sought divorce. Before the decree, on June 6, 1930, Bush
The respondent, in the notice of deficiency, has made no explanation of the ground upon which he treats the $60,000 as income, and the determination to this effect is directly contrary to his ruling, in G. C. M. 13308, C. B. XIII-32-6936, which appears to be a consideration of this identical case.
The question whether the income of such a trust as this should be included in the husband’s taxable income has now been affirmatively answered. Douglas v. Willcuts, 296 U. S. 1. The question here is whether the income from the trust is properly to be included in the taxable income of the wife. We are of opinion that since the amount is received under an express agreement it shall settle the wife’s claims for dower, maintenance and support, and that this is expressly recognized by the court’s decree as in lieu of alimony, it is brought within Gould v. Gould, 245 U. S. 151, in which the Court held that “ the sum received by the wife on account [of alimony] can not be regarded as income arising or accruing to her within the enactment.” This is clearly the proposition adopted in Douglas v. Willcuts, supra. See also Mary R. Spencer, 20 B. T. A. 58.
The respondent’s determination, including the $60,000 in the petitioner’s taxable income, is reversed.
Judgment will he entered under Rule 50.