115 F.2d 86 | 3rd Cir. | 1940
Appellant’s actual complaint is against a confusion of definition. The tax collector, the economists, the Congress, and the United States Supreme Court have not been altogether in accord on the tax meaning of “income”. The bewilderment has been augmented by a constitutional and practical necessity of ■ interpreting each other’s theories. Our category and therefore obligation is simpler. We need consider only the opinions of our highest court.
To the tax collector, all receipts are income.
The principal case lies in the field of an especially puzzling problem. That field is that of periodic payments and more closely that of terminable rights to the income of property held in trust. Two learned gentlemen
Under the ruling in the Whitehouse case, the taxability of the trustee became immediately important. To permit him a deduction for income distributed would leave the income entirely untaxed. In Helvering v. Pardee, 290 U.S. 365, 54 S.Ct. 221, 78 L.Ed. 365,
The Supreme Court will have to be convinced of the analogy between the cognate section 162(a) and (b).
The petitioner’s dilemma is too plain to need much further exposition. His trust instrument is even more indicative of invasion than that of Burnet v. Whitehouse and Helvering v. Pardee.
The decision of the Board of Tax Appeals is affirmed.
Maguire, Capitalization of Periodical Payments By Gift, 34 Harvard Law Review 20.
Maguire, Income Taxes on the Realization of Future Interests, 31 Yale Law Journal 367; Magill, The Income Tax Liability of Annuities and Similar Periodiea1 Payments, 33 Yale Law Journal 229; and see also Taxation of Sums Received Under Rights To Future Periodic Payments, 44 Yale Law Journal 660 (note).
Appeal discussed in: Taxing The Income of a Trust When The Beneficiary
Questioned in : 31 Columbia Law Review 1053; 34 Columbia Law Review 183.
The Power to Invade Corpus in Federal Income Taxation of Trusts, 49 Yale Law Journal 1496 (note).
The expression is not found in-the brief of counsel.
Seidman, Legislative History of Federal Income Tax Laws, (1938) p. 380
26 U.S.C.A. Int.Rev.Code, § 162(a; (the one being permanently set aside for charitable purposes); 26 U.S.C.A. Int.Rev.Code, § 162(b) (the one applicable here).
Hartford-Connectieut Trust Co. v. Eaton, 2 Cir., 36 F.2d 710; HartfordConnecticut Trust Co. v. Eaton, D.C., 41 F.2d 69; and see Helen G. Bonfils, Ex’r, v. Comm. of Internal Revenue, 40 B.T.A. 1079, Dec. 8, 1939; Hartford Nat. Bank & Trust Co. v. Hartford-Connecticut Trust Co., 20 Am.Fed.Tax R. 1325.*
Boston Safe Deposit & Trust Go. v. Comm., 1 Cir., 66 F.2d 179, certiorari denied, 290 U.S. 700, 54 S.Ct 227, 78 L.Ed. 602.
But contra: ■ Charles P. Moorman Home for Women v. United States, D. C., 42 F.2d 257; see Guaranty Trust Co. of New York, Ex’r, v. Comm, of Internal Revenue, 31 B.T.A. 19, 22, affirmed, 2 Cir., 76 F.2d 1010.
Int.Rev.Code § 3801(b) (4) (1939), 26 U.S.C.A. Int.Rev.Code, § 3801(b) (4); U. S. Treas. Reg. 103, See. 19.3801(b)-t; and see Maguire, Surrey and Traynor, Section 820 of the Revenue Act of 1938, 48 Yale Law Journal 509, 719, 760, n. 157.
The will there provided: “I also give unto my said wife an annuity of Fifty thousand Dollars ($50,000.), to be computed from the date of my .decease and to be paid in advance in quarterly payments.” Helvering v. Pardee, 290 U.S. 365, 370, 54 S.Ct. 221, 223, 78 L.Ed. 365.