Hudson v. Commissioner
United States Tax Court
The trustee of a Pennsylvania testamentary trust acquired an office building by deed from the owner, who thereby avoided further payment of ground rent. The trustee paid taxes, repairs, and operating expenses in excess of gross rents in the taxable years, using the trust's gross income, which would otherwise have been payable to the taxpayer, life beneficiary. The Commissioner determined the amounts so used distributable and taxable to the taxpayer beneficiary.
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The trustee of a Pennsylvania testamentary trust acquired an office building by deed from the owner, who thereby avoided further payment of ground rent. The trustee paid taxes, repairs, and operating expenses in excess of gross rents in the taxable years, using the trust's gross income, which would otherwise have been payable to the taxpayer, life beneficiary. The Commissioner determined the amounts so used distributable and taxable to the taxpayer beneficiary. Held: (a) Court approval of the 1937 accounts of a trustee who used income to pay carrying charges on trust-held real estate is…
1Opinion of the Court
OPINION.
Johnson, Judge:
Under the theory that trust income which the trustee applied to the payment of taxes, repairs, and operating expenses of the Broad Street building should have been charged against trust principal, the Commissioner has determined by a computation not fully disclosed that such a charge would release funds for distribution to petitioner as life beneficiary and accordingly has added to the income reported by her $12,329.73 for 1937, $10,857.08 for 1938, and $15,896.43 for 1940, as representing amounts distributable and, hence, taxable to her as trust income under section…
2Cases cited15 opinions
- Blair v. CommissionerSupreme Court of the United States · 1937
- Freuler v. HelveringSupreme Court of the United States · 1934
- Nirdlinger's Estate (No. 2)Supreme Court of Pennsylvania · 1937
- Nirdlinger's EstateSupreme Court of Pennsylvania · 1938
- Levy's EstateSupreme Court of Pennsylvania · 1939
10 more not listed; retrieve them via the Exa API.
3Cited by3 opinions
- Hill v. CommissionerUnited States Tax Court · 1955
- Hill v. CommissionerUnited States Tax Court · 1955
- Hudson v. CommissionerUnited States Tax Court · 1947