Krause v. Commissioner
United States Tax Court
Petitioner Victor W. Krause transferred property to three trusts created for the benefit of his grandchildren, and the trustees agreed to pay the resulting gift tax liabilities. The trustees were given discretion to use the trust income, the proceeds of the sale of portions of the corpora, or borrowed funds for this purpose.
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Petitioner Victor W. Krause transferred property to three trusts created for the benefit of his grandchildren, and the trustees agreed to pay the resulting gift tax liabilities. The trustees were given discretion to use the trust income, the proceeds of the sale of portions of the corpora, or borrowed funds for this purpose. Held, petitioners realized taxable income under secs. 671 and 677, I.R.C. 1954, in the amount of the income received by the trusts prior to the payment of the gift tax liabilities but did not realize any other income as a result of the payment of such taxes.
1Opinion of the Court
OPINION
Featherston, Judge:
Respondent determined a deficiency in petitioners’ Federal income tax for 1964 in the amount of $91,249.05. The issue for decision is whether funds derived by trusts from dividends and loans and used, pursuant to the trust instruments, to pay the gift taxes resulting from the creation of the trusts are income taxable to petitioners.
Victor W. Krause (hereinafter referred to as petitioner) and Gordon C. Krause, administrator of the Estate of Gertrude C. Krause, were legal residents of Rockford, Mich., at the time they filed their petition. Gordon C. Krause is a…
2Cases cited13 opinions
- Helvering v. CliffordSupreme Court of the United States · 1940
- Commissioner v. CulbertsonSupreme Court of the United States · 1949
- Mallinckrodt v. CommissionerUnited States Tax Court · 1943
- Mallinckrodt v. NunanCourt of Appeals for the Eighth Circuit · 1945
- Turner v. CommissionerUnited States Tax Court · 1968
8 more not listed; retrieve them via the Exa API.
3Cited by17 opinions
- Hirst v. CommissionerUnited States Tax Court · 1974
- Estate of Henry v. CommissionerUnited States Tax Court · 1978
- Paxton v. CommissionerUnited States Tax Court · 1972
- Johnson v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1974
- Diedrich v. CommissionerCourt of Appeals for the Eighth Circuit · 1981
12 more not listed; retrieve them via the Exa API.