Pettus v. Commissioner
United States Tax Court
Petitioners established identical trusts for the benefit of each of their minor children. Each trust instrument provided that the income of the trust was to be paid to the beneficiary or accumulated as the trustee determined in his uncontrolled discretion. The principal of each trust could be invaded only if the trustee determined that the beneficiary was "in need of funds," because of "illness, infirmity or disability, either mental or physical."
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Petitioners established identical trusts for the benefit of each of their minor children. Each trust instrument provided that the income of the trust was to be paid to the beneficiary or accumulated as the trustee determined in his uncontrolled discretion. The principal of each trust could be invaded only if the trustee determined that the beneficiary was "in need of funds," because of "illness, infirmity or disability, either mental or physical." The trustee was granted discretion to add accumulated income to the principal, and was also granted other extensive administrative powers.…
1Opinion of the Court
OPINION
Eespondent determined that petitioners’ gifts in trust to their minor children failed to meet the requirements of sections 2503(b) and 2503(c). The former4 excludes from taxable gifts the first $3,000 of gifts made during a calendar year by a donor to any person,5 but provides that the exclusion does not apply to gifts of “future interests in property.” That term — defined under the Federal gift tax law, regardless of the local law definition — refers to “any interest or estate, whether vested or contingent, limited to commence in possession or enjoyment at a future date.” United…
2Cases cited40 opinions
- Commissioner v. South Texas Lumber Co.Supreme Court of the United States · 1948
- United States v. CorrellSupreme Court of the United States · 1967
- Brewster v. GageSupreme Court of the United States · 1930
- United States v. PelzerSupreme Court of the United States · 1941
- Koshland v. HelveringSupreme Court of the United States · 1936
35 more not listed; retrieve them via the Exa API.
3Cited by10 opinions
- Lera H. Stark v. United States of America, William P. Stark v. United StatesCourt of Appeals for the Eighth Circuit · 1973
- Heidrich v. CommissionerUnited States Tax Court · 1971
- Martinez v. CommissionerUnited States Tax Court · 1976
- Swetland v. CommissionerUnited States Tax Court · 1978
- Craig v. CommissionerUnited States Tax Court · 1971
5 more not listed; retrieve them via the Exa API.