Commissioner of Internal Revenue v. Mills

DENMAN, Chief Judge.

This is a petition by the Commissioner of Internal Revenue for review of decisions 1 of the Tax Court of the United States holding that the Commissioner erred in determining deficiencies in respondent Mills’ federal gift tax returns for the tax years 1943, 1944 and 1945. The returns set forth an agreement between taxpayer and his wife by which the income determined as a gift by the Commissioner was the separate property of each and that the transaction was upon a full consideration in money’s worth.

The Tax Court held that a division of the community property between…