Estate of Bell v. Commissioner
United States Tax Court
Held: 1. Where property is exchanged for a secured contract to pay an annuity, the recoverable "investment in the contract" as defined in sec. 72(c), I.R.C. 1954, is the fair market value of the property transferred. 2. Where the fair market value of the property transferred substantially exceeds the commuted value of the annuity, in the absence of any proof to the contrary, such excess is deemed to be a gift.
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Held: 1. Where property is exchanged for a secured contract to pay an annuity, the recoverable "investment in the contract" as defined in sec. 72(c), I.R.C. 1954, is the fair market value of the property transferred. 2. Where the fair market value of the property transferred substantially exceeds the commuted value of the annuity, in the absence of any proof to the contrary, such excess is deemed to be a gift. Under such circumstances, the taxpayer's "investment in the contract" is limited to the commuted value of the annuity. 3. The gain attributable to the excess or difference between the…
1Opinion of the Court
Quualy, Judge:
Respondent determined the following deficiencies in petitioners’ income tax:
Year Deficiency
1968 _$1, 931. 91
1969 _ 2, 926.11
Some of the facts have been stipulated by the parties and are incorporated herein by reference. As a result of concessions made by the parties, the following issues remain for decision:(1) The determination of petitioners’ “investment in the contract” in the years 1968 and 1969 for purposes of the exclusion ratio provided for imder section 72 (b);1(2) To the extent that petitioners’ “investment in the contract” exceeds their adjusted basis of the stock…
2Cases cited25 opinions
- Burnet v. LoganSupreme Court of the United States · 1931
- Commissioner v. WemyssSupreme Court of the United States · 1945
- Agar v. OrdaNew York Court of Appeals · 1934
- McMurtry v. Commissioner of Internal RevenueCourt of Appeals for the First Circuit · 1953
- Pacific Coast Music Jobbers, Inc. v. CommissionerUnited States Tax Court · 1971
20 more not listed; retrieve them via the Exa API.
3Cited by23 opinions
- La Fargue v. CommissionerUnited States Tax Court · 1979
- 212 Corp. v. CommissionerUnited States Tax Court · 1978
- Esther Lafargue v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1982
- Stern v. CommissionerUnited States Tax Court · 1981
- Garvey, Inc. v. United StatesUnited States Court of Claims · 1983
18 more not listed; retrieve them via the Exa API.