Newbury v. Commissioner
United States Board of Tax Appeals
A testamentary trustee, pursuant to authority vested in her by the will, erected a building on real estate acquired from the testator, and paid for it out of trust funds and borrowed money, and continuously reserved from the rentals sufficient amounts to establish a fund to replace in the corpus so much of such investment as is lost by depreciation.
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A testamentary trustee, pursuant to authority vested in her by the will, erected a building on real estate acquired from the testator, and paid for it out of trust funds and borrowed money, and continuously reserved from the rentals sufficient amounts to establish a fund to replace in the corpus so much of such investment as is lost by depreciation. The amounts so reserved should not be included in the distributable income of the beneficiaries where since the erection of the building they have acquisced in the action of the trustee and where the will required, or was at least susceptible of,…
1Opinion of the Court
*106OITNION.
MuRDOCK:
The only question in these proceedings is to determine the amount of income of the trust which is taxable to the beneficiaries. Its solution depends upon the rights of these beneficiaries under the will of Charles Netcher. They claim the trustee had a right and a duty to retain enough from the annual income from rents to offset depreciation on the building. The Commissioner maintains that he made no mistake in adding this retained amount to the income of the beneficiaries.
Where a trustee makes investments with the corpus of an estate, he is duty bound to see that, so far as…
2Cases cited5 opinions
- New England Trust Co. v. EatonMassachusetts Supreme Judicial Court · 1886
- Gartenlaub v. Union Tr. Co. of S.F.California Supreme Court · 1921
- In re Allis's EstateWisconsin Supreme Court · 1904
- Curtis v. OsbornSupreme Court of Connecticut · 1907
- Ballantine v. YoungNew Jersey Court of Chancery · 1908
3Cited by4 opinions
- Commissioner of Internal Revenue v. NetcherCourt of Appeals for the Seventh Circuit · 1944
- Newbury v. United StatesUnited States Court of Claims · 1944
- Newbury v. CommissionerUnited States Board of Tax Appeals · 1932
- Newbury v. United StatesUnited States Court of Claims · 1944