McAllister v. Commissioner of Internal Revenue

Taxpayer’s father-in-law, by his will, created a trust by which taxpayer during her life was to receive the income from a fund of $100,000; the will provided thát she was not to dispose of her interest or otherwise to anticipate the income. She joined with others interested in the trust to demolish it; in consideration of her doing so, she received a lump sum of $55,000, *238The question is whether, with respect to that $55,000, resulting from the frustration of the testator’s purpose through the destruction of the trust, she is entitled to the exceptional advantages of the capital gains…