Whiteley v. Commissioner of Internal Revenue

GOODRICH, Circuit Judge.

This appeal from the Board of Tax Appeals involves income taxes for the years 1933, 1934, and 1935. There are two issues presented which are dealt with separately in this opinion.

I

The first issue involves income tax for the three years mentioned and turns upon facts and circumstances surrounding a trust which was set up by a trust deed executed May 31, 1932 by Purdon Smith Whiteley, wife of the taxpayer, with the husband as beneficiary. Respondent relies upon § 166 of the Revenue Acts of 1932 and 1934, 26 U.S.C.A. Int.Rev.Acts, pages 543, 727, adding for good measure §…