Kahn v. Commissioner

1926 BTA LEXIS 2037 | B.T.A. | 1926

Lead Opinion

OPINION.

Smith:

The taxing statute requires the inclusion in the gross estate of a decedent of the value of property transferred in contemplation of death, and further provides that:

Any transfer of a material part of Ms [decedent’s] property in the nature of a final disposition or distribution thereof, made by the decedent within two years prior to his death without such a consideration, shall, unless shown to the contrary, be deemed to have been made in contemplation of death within the meaning of this title. Revenue Act of 1921, section 402(c).

The only question here is whether the transfer of the right to receive the shares of stock payable to the decedent as a stock dividend was made in contemplation of death. The following definition of the statutory phrase “ in contemplation of death,” frequently quoted by State and Federal courts, is given in the case of Rosenthal v. People, 211 Ill. 306; 71 N. E. 1121:

A gift is made in contemplation of an event when it is made in expectation of that event and having it in view; and a gift made when the donor is looking forward to his death as impending, and in view of that event, is within the language of the statute.

The New York courts, in In re Baker’s Estate, 82 N. Y. S. 390; affd. 70 N. E. 1094, said :

This court has held that the words “ in contemplation of death ” do not refer to a general expectation which every mortal entertains, but rather the apprehension which arises from some existing condition of body or some impending peril; * * * and this we believe is now the generally accepted definition of the phrase.

In State v. Pabst, 139 Wis. 561; 121 N. W. 351, the court said:

The words [in contemplation of death] are evidently intended to refer to an expectation of death which arises from such a bodily or mental condition as prompts persons to dispose of their property and bestow it on those whom they regard as entitled to their bounty.

Whether a gift has been made in contemplation of death is almost uniformly treated in the administration of tax laws as a question of fact. Spreckels v. State, 30 Cal. App. 363; 158 Pac. 549; People v. Kelley, 218 Ill. 509; 75 N. E. 1038; Shwab v. Doyle, 269 Fed. 321. It is proper that the presumption of fact afforded by the statute be taken into account in determining whether the gift was made in contemplation of death. Shwab v. Doyle, supra.

In the instant case the facts not only fail to overcome the presumption provided by the statute, but they show in themselves that the decedent must have been aware of impending death at or about the time of the transfer. He had been in declining health for several years prior to his death. He knew that he had high blood pressure-He consulted a specialist in New Orleans of his own volition. On at least two occasions a few months before his death he had suffered violent heart attacks. Those attacks occurred at some time near the date of the transfer, the evidence not disclosing whether before or after that date.

Judgment for the Commissioner.