Whitcomb v. Commissioner
United States Board of Tax Appeals
Taxpayers are life tenants under a trust which includes depreciable assets. The trustee, in returning the net income of the trust, deducted and was allowed the deduction of an allowance for exhaustion, wear and tear. Distributions to the beneficiaries of life interests were made irrespective of such allowances, and the Commissioner, in auditing the returns of the beneficiaries did not permit the said allowance for depreciation to be divided amongst them.
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Taxpayers are life tenants under a trust which includes depreciable assets. The trustee, in returning the net income of the trust, deducted and was allowed the deduction of an allowance for exhaustion, wear and tear. Distributions to the beneficiaries of life interests were made irrespective of such allowances, and the Commissioner, in auditing the returns of the beneficiaries did not permit the said allowance for depreciation to be divided amongst them. Held, that, under section 219 of the Revenue Act of 1918, life beneficiaries are not entitled to allowances which rate to capital…
1Opinion of the Court
*82OPINION.
James: The- petitioners contend that the net income, the distributive share of which is taxable to these beneficiaries, is the statutory net income of the trust divided into the number of shares provided in the will. The Commissioner agrees that the statutory net income is the starting point of the computation, but contends that the distributive shares of life beneficiaries must be computed with due regard to what they actually receive under the trust as income and that the remainder interests must be given due consideration in the computation of such distributive shares.
*83The question…
2Cases cited1 opinion
- Merchants' Loan & Trust Co. v. SmietankaSupreme Court of the United States · 1921
3Cited by12 opinions
- Freuler v. HelveringSupreme Court of the United States · 1934
- Drake v. CommissionerUnited States Board of Tax Appeals · 1934
- Brown v. CommissionerUnited States Board of Tax Appeals · 1932
- Chambers v. CommissionerUnited States Board of Tax Appeals · 1929
- Fleming v. CommissionerUnited States Board of Tax Appeals · 1927
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