Gillespie v. Commissioner
United States Board of Tax Appeals
Petitioner on May 15, 1929, agreed to transfer certain properties to the F. A. Gillespie & Sons Co., the capital stock of which was held in trust for herself, her husband, and their sons for the period of their lives, with remainder to petitioner's grandchildren. As part consideration the transferee company agreed to pay petitioner two annuities totaling $25,000 annually.
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Petitioner on May 15, 1929, agreed to transfer certain properties to the F. A. Gillespie & Sons Co., the capital stock of which was held in trust for herself, her husband, and their sons for the period of their lives, with remainder to petitioner's grandchildren. As part consideration the transferee company agreed to pay petitioner two annuities totaling $25,000 annually. Held, the cost basis of the annuities to be used in computing the tax due under section 22(b)(2) of the Revenue Act of 1934 is the cost of these annuities from an insurance company and not the value of the transferred…
1Opinion of the Court
*403OPINION.
Hill :
The substantial question which we are called on to decide here is the nature of the contract entered into between petitioner and F. A. Gillespie and the company on May 15, 1929. The petitioner argues initially (1) that it constituted a sale of the properties transferred, with payment to be made in annual installments, and the annual payments, therefore, constituting a return of capital, may not be taxed as income. (2) It is contended in the alternative that if the amounts agreed under the contract to be paid to petitioner are considered annuities, their taxation under section 22…
2Cited by10 opinions
- Estate of Bell v. CommissionerUnited States Tax Court · 1973
- Gillespie v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1945
- Commissioner of Internal Revenue v. Kann's EstateCourt of Appeals for the Third Circuit · 1949
- Gillespie v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1942
- Ware v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1947
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