Luman v. Commissioner
United States Tax Court
P and her husband paid $ 20,000 to Educational Scientific Publishers for materials and advice to establish a family trust. Subsequently, P and her husband transferred most of their assets, including their ranch business, to the trust. The trust was created in an attempt to retain the ranch in their family.
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P and her husband paid $ 20,000 to Educational Scientific Publishers for materials and advice to establish a family trust. Subsequently, P and her husband transferred most of their assets, including their ranch business, to the trust. The trust was created in an attempt to retain the ranch in their family. Held: 1. The income from the assets of the trust is taxable to P individually under secs. 671- 677, I.R.C. 1954 (the grantor trust provisions). 2. The cost of creating the trust was a personal expense ( sec. 262, I.R.C. 1954), not deductible under sec. 212, I.R.C. 1954. P failed to prove…
1Opinion of the Court
Simpson, Judge:
The Commissioner determined the following deficiencies in, and additions to, the petitioner’s Federal income taxes:2
Addition to tax sec. 6653(a),
Year Deficiency I.RC. 19543
1974 $6,393.21 $319.66
1975 3,245.34 160.47
1976 6,345.07 315.96
The issues for decision are: (1) Whether the income reported by a family trust created by Robert Luman is taxable to the petitioner, individually; (2) whether the petitioner is entitled to deduct under section 212 the expenses of establishing the family trust; and (3) whether the petitioner is liable for the addition to tax under section 6653(a)…
2Cases cited30 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- Cohan v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1930
- Bixby v. CommissionerUnited States Tax Court · 1972
- W. Horace Williams, Sr., and Viola Bloch Williams v. United StatesCourt of Appeals for the Fifth Circuit · 1957
- Brotherhood of Locomotive Engineers v. Louisville & Nashville RailroadSupreme Court of the United States · 1963
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3Cited by252 opinions
- Niedringhaus v. CommissionerUnited States Tax Court · 1992
- Professional Services v. CommissionerUnited States Tax Court · 1982
- LaVerne v. CommissionerUnited States Tax Court · 1990
- Johnsen v. CommissionerUnited States Tax Court · 1984
- Matthews v. CommissionerUnited States Tax Court · 1989
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