W. Stanley Barrett v. Commissioner of Internal Revenue

BURGER, Circuit Judge.

This appeal involves the question whether election made by one of the petitioners to take paid-up life insurance policies under an option in matured endowment policies held by him gave rise to capital gain or to ordinary income. The endowment policies when issued provided that at maturity the petitioner as the insured would have four options: receipt of (1) a monthly income for life; (2) a lump-sum cash payment; (3) a paid-up life insurance policy; or (4) a lump-sum cash payment and a paid-up life insurance policy. At maturity in 1960 an election was duly made to take…