In Re Thomas C. Sawyer Estate

Costello, D.J. (Ret.),

Specially Assigned. The Department of Taxes (Department) appeals from the trial court’s holding that certain income received by the appellee Estate (Estate) is not taxable. We affirm in part and reverse in part.

Part of the Estate’s income is dividend income received from the Trust for Short Term United States Government Securities (Trust). For the fiscal year ending November 30, 1983, the Estate received a distribution of $4,039.38 from the Trust. The administrator filed a Vermont fiduciary income tax return for this distribution and paid a tax on the full amount.

On May…