August J. Fabens v. Commissioner of Internal Revenue

McENTEE, Circuit Judge.

The parties stipulated that from 1953 to 1969 taxpayer Fabens maintained in a trust account municipal bonds, the in come from which was tax-exempt, and other securities the income from which was taxable. The trust also realized capital gains and losses from transactions involving its holdings. Upon termination the fair market value of the trust assets included a considerable amount of unrealized capital appreciation 1 which was reflected in the fiduciary fees paid on termination and computed under local law as a percentage of current market value. Taxpayer deducted the…