Sheaffer v. Commissioner of Internal Revenue

MATTHES, Circuit Judge.

This case is here on a petition to review the decision of the Tax Court which determined deficiencies in federal income taxes against petitioners for the calendar years 1954 and 1955 in the amounts of $120,008.64 and $78,352.25, respectively. The decision of the Tax Court is reported at 37 T.C. 99 (1961).

The underlying question for determination is whether for federal income tax *739purposes, the 1954 and 1955 income derived from the corpus of trust property and applied by the trustee toward payment of the federal gift tax on the corpus was income to the donors (settlors)…