Schmitt v. State Tax Commission

This is an appeal from the Oregon Tax Court concerning the Oregon Personal Income Tax. The taxpayers claimed a charitable contribution as a deduction. The deduction was disallowed.

The plaintiffs, Mr. and Mrs. Herman Schmitt, deeded an interest in income property to Mr. Herman Schmitt, as trustee. At the same time the parties entered into a trust agreement. The principal terms of the agreement were: (1) The net income of the property was to be paid to Mr. and Mrs. Schmitt during their lifetimes and to the survivor; (2) Upon the survivor’s death the principal and any accrued income was to be…