Garland v. Commissioner
United States Board of Tax Appeals
1. Where the settlor of a trust reserves the power to borrow from the trust corpus up to $100,000 on his unsecured notes and reserves further all rights of the insured under certain insurance policies transferred to the trust, held, the trust is revocable within the meaning of section 166 of the Revenue Act of 1934. 2. Interest from municipal bonds issued under the California Municipal Improvement District Act of April 20, 1915, held, exempt from Federal income tax.
1Opinion of the Court
*328OPINION.
Hill:
The question first presented for our decision is whether the petitioner is taxable on the income distributed to his divorced wife in the years 1934 and 1935 from the trust established on March 25, 1931. One of the contentions of respondent is that this income is taxable to the petitioner on the basis of Douglas v. Willcuts, 296 U. S. 1, and Helvering v. Leonard, 310 U. S. 80, in each of which cases the settlor of a trust, entered into in contemplation of divorce, was held taxable on the income used to discharge a continuing obligation to support a divorced spouse. We deem it…
2Cases cited3 opinions
- Helvering v. CliffordSupreme Court of the United States · 1940
- Douglas v. WillcutsSupreme Court of the United States · 1935
- Helvering v. LeonardSupreme Court of the United States · 1940
3Cited by4 opinions
- Commissioner of Internal Revenue v. BatemanCourt of Appeals for the First Circuit · 1942
- Cahill v. CommissionerUnited States Tax Court · 1982
- Garland v. CommissionerUnited States Board of Tax Appeals · 1940
- Garland v. CommissionerUnited States Board of Tax Appeals · 1941