Field's Estate v. Commissioner

144 F.2d 62 | 2d Cir. | 1944

FRANK, Circuit Judge.

In Helvering v. Hallock, 309 U.S. 106, 111, 60 S.Ct. 444, 84 L.Ed. 604, 125 A.L.R. 1368, the Court said that “the measure of the tax is the value of the transferred property at the time when death brings it into enjoyment” Precisely what that means has been a matter of much comment.1 We do not agree with the Tax Court that Smith v. Shaughnessy, 318 U.S. 176, 63 S.Ct. 545, 87 L.Ed. 690, which dealt with a gift tax, aids decision here. Whatever we might now hold if this were for us a novel question, we need not consider, for the matter is governed in this circuit by our decisions in Commissioner v. Flanders, 2 Cir., 111 F.2d 117 and Bankers Trust Co. v. Higgins, 2 Cir., 136 F.2d 477. Accordingly we hold that the value of the transfer at decedent’s death consisted of the value of the trust property minus the value of the life estates of his two nieces. The resulting taxable value here is $24,930.76. We reverse with directions to the Tax Court to fix the tax on that value.

Reversed and remanded.

See Paul, Federal Estate and Gift Taxation, Sec. 7.25.