Springdale Cemetery Asso. v. Commissioner
United States Board of Tax Appeals
1. The directors of the taxpayer by informal action set up as a reserve fund, for the perpetual care of cemetery lots, a percentage of the price received for lots sold. There was a contract obligation with the purchasers to keep the lots in repair, but no trust was created in favor of the lot owners.
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1. The directors of the taxpayer by informal action set up as a reserve fund, for the perpetual care of cemetery lots, a percentage of the price received for lots sold. There was a contract obligation with the purchasers to keep the lots in repair, but no trust was created in favor of the lot owners. Held, that the sum appropriated for the reserve fund may not be subtracted from the sale price in ascertaining the gain realized on the sale. 2. In considering the price received for lots sold around March 1, 1913, as evidence of the value of the remaining lots on that date, such price may not be…
1Opinion of the Court
*225OPINION.
SteRnhagen:
The situation here is different from that considered in the Appeal of The Los Angeles Cemetery Association, 2 B. T. A. 495, for there the fund for perpetual care was mandatory .and was clearly a trust fund. Here it is permissive under the State law. Bourland v. Springdale Cemetery Association, 158 Ill. 458; 42 N. E. 86. The taxpayer voluntarily set up a reserve based on an ■estimate, but there is lacking the clear evidence necessary to establish a trust. So far as the record shows, the directors might at any time reduce the fund or perhaps wipe it out, without restraint,…
2Cases cited1 opinion
- Bourland v. Springdale Cemetery Ass'nIllinois Supreme Court · 1895