Estate of Sydney J. Carter, Deceased (A/k/a Sydney J. Canter) v. Commissioner of Internal Revenue

FRIENDLY, Chief Judge:

The taxpayers’ appeal from a judgment of the Tax Court, 29 CCH Tax Ct.Mem. 1407 (1970), raises the frequently litigated question whether payments by an employer to the widow of a deceased employee constituted compensation to the latter, includible as gross income under I.R.C. § 61(a), or a gift to the survivor, excludible under § 102(a).

Sydney J. Carter had been employed by the New York City financial house of Salomon Bros. & Hutzler (“Salomon Bros.”) for 38 years when he died on March 1, 1960. At that time he was working under a yearly employment contract entitling him…