McFaddin v. Commissioner of Internal Revenue

HUTCHESON, Circuit Judge.

Taxpayers, married persons living in Texas, beneficiaries of the McFaddin trust, a trust of Texas property established and managed in Texas, returned as community all the income they had received from the trust in the tax years in question, 1938 and 1939. Disagreeing with the taxpayers in respect of several matters, including (1) their claim that all of the income from the trust was community property, and (2) that profits from the sale of an addition known as Central Gardens should be returned not as ordinary income but as capital gains, and if not, should be…