Jones v. Commissioner
United States Tax Court
Petitioner purchased from a dealer in remainder interests in trust estates, two contingent remainders, and the dealer assigned to him insurance policies covering the lives of the remaindermen whose interests petitioner purchased. After the death of the life tenants petitioner canceled the insurance policies and transferred the interests in the trusts to another for the purpose of achieving capital gains treatment of the profits.
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Petitioner purchased from a dealer in remainder interests in trust estates, two contingent remainders, and the dealer assigned to him insurance policies covering the lives of the remaindermen whose interests petitioner purchased. After the death of the life tenants petitioner canceled the insurance policies and transferred the interests in the trusts to another for the purpose of achieving capital gains treatment of the profits. Held: (1) The gain received by petitioner from the sale of the remainder interests constitutes ordinary income. (2) The net costs to petitioner of the insurance…
1Opinion of the Court
Scott, Judge:
Respondent determined deficiencies in petitioners’ income tax for the calendar years 1957 and 1959 in the amounts of $1,981.28 and $1,286.23, respectively.
The issues for decision are:(1) Whether the gain realized by petitioners upon the transfer of a remainder interest in each of two trusts after the death of the life tenant but prior to distribution, constitutes ordinary income or long-term capital gain.(2) Whether the net cost of insurance premiums paid by petitioners on an insurance policy insuring the life of the remainderman of each trust until after the death of the life…
2Cases cited33 opinions
- Burnet v. HarmelSupreme Court of the United States · 1932
- Corn Products Refining Co. v. CommissionerSupreme Court of the United States · 1956
- Commissioner v. P. G. Lake, Inc.Supreme Court of the United States · 1958
- Osenbach v. Commissioner of Internal RevenueCourt of Appeals for the Fourth Circuit · 1952
- Commissioner of Internal Revenue v. J. I. Morgan and Frances MorganCourt of Appeals for the Ninth Circuit · 1959
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3Cited by6 opinions
- Koch v. CommissionerUnited States Tax Court · 1976
- Jones v. CommissionerUnited States Tax Court · 1963
- Jones v. CommissionerUnited States Tax Court · 1966
- Koch v. CommissionerUnited States Tax Court · 1976
- O'Neill v. CommissionerUnited States Tax Court · 1963
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