Estate of Bell v. Commissioner
United States Tax Court
Held: 1. Where property is exchanged for a secured contract to pay an annuity, the recoverable "investment in the contract" as defined in sec. 72(c), I.R.C. 1954, is the fair market value of the property transferred. 2. Where the fair market value of the property transferred substantially exceeds the commuted value of the annuity, in the absence of any proof to the contrary, such excess is deemed to be a gift.
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Held: 1. Where property is exchanged for a secured contract to pay an annuity, the recoverable "investment in the contract" as defined in sec. 72(c), I.R.C. 1954, is the fair market value of the property transferred. 2. Where the fair market value of the property transferred substantially exceeds the commuted value of the annuity, in the absence of any proof to the contrary, such excess is deemed to be a gift. Under such circumstances, the taxpayer's "investment in the contract" is limited to the commuted value of the annuity. 3. The gain attributable to the excess or difference between the…
1DissentSimpsoN, J.
I must dissent from tbe majority opinion with respect to its holding that tbe gain resulting from tbe exchange of tbe stock for the private annuity was taxable in tbe year of the exchange. Such conclusion was not sought by the respondent. Although tbe majority opinion results in no part of tbe gain on tbe exchange being taxable in 1968 and 1969, it may ultimately result in the petitioners having a larger tax burden than that contended for by tbe respondent. If section 1311, I.R.C. 1954, is applicable, as may be the case, tbe entire gain of $105,142.81 will be taxable to tbe petitioners in…
2Cases cited11 opinions
- Burnet v. LoganSupreme Court of the United States · 1931
- Johnston v. CommissionerUnited States Tax Court · 1950
- Lloyd v. CommissionerUnited States Board of Tax Appeals · 1936
- Western Oaks Bldg. Corp. v. CommissionerUnited States Tax Court · 1968
- Estate of Ennis v. CommissionerUnited States Tax Court · 1955
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