Stanley v. Commissioner
United States Board of Tax Appeals
A husband created an irrevocable trust for his wife's benefit without color of alimony, and, after beginning a divorce action against her two years later in Illinois, transferred additional securities to the trust in consideration of her release of all claims growing out of the marital relation. A divorce decree was granted, denying the wife alimony.
Read the full summary
A husband created an irrevocable trust for his wife's benefit without color of alimony, and, after beginning a divorce action against her two years later in Illinois, transferred additional securities to the trust in consideration of her release of all claims growing out of the marital relation. A divorce decree was granted, denying the wife alimony. Since the trust agreement was a final settlement and the court has no jurisdiction to modify the decree, the husband has no continuing marital obligation to discharge, and the trust income is not taxable to him.
1Opinion of the Court
*1236OPINION.
Sternhagen :
The Commissioner determined that the trust was in lieu of alimony and for that reason he included the trust income in petitioner’s gross income. The petitioner assails this, contending that the trust was not in lieu of alimony, and that he had no obligation to pay alimony or, under Illinois law, to support his divorced wife.
The trust was made before the divorce proceeding was begun and, as appears from the record, was not an incident of divorce or separation, even though the wife soon thereafter left the petitioner’s home and did not return. When made, therefore, the trust…
2Cases cited5 opinions
- Helvering v. FullerSupreme Court of the United States · 1940
- Kelley v. KelleyIllinois Supreme Court · 1925
- Smith v. SmithIllinois Supreme Court · 1929
- Smith v. JohnsonIllinois Supreme Court · 1926
- Schneider v. SchneiderAppellate Court of Illinois · 1936
3Cited by1 opinion
- Stanley v. CommissionerUnited States Board of Tax Appeals · 1940