Clark Trust v. Commissioner
United States Tax Court
The Clark Trust was created to provide perpetual care for cemetery lots located in the trustee's cemetery. The trust agreement provided that the trustee was to "apply" trust income to perpetual care of the cemetery lots. There was no express power to accumulate income. Held, the trust agreement must be interpreted so as to fulfill the purposes of the grantor, and due to the nature of those purposes, the Clark Trust is not required to distribute all of its income currently.
1Opinion of the Court
OPINION
The question presented in this case is whether the Clark Trust is a “trust which, under its governing instrument, is required to distribute all of its income currently” within the meaning of section 642(b) of the Internal Revenue Code of 1954.2 Such a trust is commonly referred to as a “simple” trust. If the Clark Trust is not a simple trust, it is entitled to a personal exemption of $100 rather than the $300 claimed on its 1962 return.
The respondent argues that the trust agreement allows the Cemetery to accumulate trust income and that the applicable New York law also permits such…
2Cases cited3 opinions
- Gasquet v. PollockAppellate Division of the Supreme Court of the State of New York · 1896
- In re the Estate of GeltmanNew York Surrogate's Court · 1949
- Ridge v. FeltNew York Supreme Court · 1945
3Cited by1 opinion
- Clark Trust v. CommissionerUnited States Tax Court · 1968