Merritt v. Commissioner
United States Tax Court
Petitioners (two sisters and a brother) plus their mother and another brother owned all the stock of B corporation. With a view towards restricting ownership of stock in B to members of their family, the stockholders on June 18, 1932, entered into an agreement reserving to each a life interest in the stock owned by each, with provisions for devolution of the remainder in the stock of each to his or her children or descendants or, in the case of petitioners and their brother,…
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Petitioners (two sisters and a brother) plus their mother and another brother owned all the stock of B corporation. With a view towards restricting ownership of stock in B to members of their family, the stockholders on June 18, 1932, entered into an agreement reserving to each a life interest in the stock owned by each, with provisions for devolution of the remainder in the stock of each to his or her children or descendants or, in the case of petitioners and their brother, to their brothers and sisters, in the absence of children or descendants. They reserved the right to receive all…
1Opinion of the Court
OPINION.
Raum, Judge:
The Commissioner contends that when the petitioners executed the 1932 agreement they made gifts of remainder interests in trust which were subject to tax under section 501 of the Revenue Act of 1932. Petitioners concede for the purposes of argument that the agreement created remainder interests in the stock of Bellemead. They urge, however, that no completed gifts were made which would subject fliem to gift tax because the reservation in the agreement of the right to receive distributions of capital, coupled with their power to cause the corporation to make distributions,…
2Cases cited4 opinions
- Burnet v. GuggenheimSupreme Court of the United States · 1933
- Commissioner of Internal Revenue v. ProutyCourt of Appeals for the First Circuit · 1940
- Gillette v. CommissionerUnited States Tax Court · 1946
- Pleet v. CommissionerUnited States Tax Court · 1951
3Cited by2 opinions
- Merritt v. CommissionerUnited States Tax Court · 1957
- Pullman v. CommissionerUnited States Tax Court · 1964