T. M. Britt and Jane Britt v. The United States of America

WISDOM, Circuit Judge:

This tax refund case involves the difficult application of the rule that income from property must be taxed to the individual who, in substance, is the owner of the property generating the income. Helvering v. Horst, 1940, 311 U.S. 112, 61 S.Ct. 144, 85 L.Ed. 75. Here, the taxpayers transferred the property in question to three corporations. The district court found that as a matter of law the level of business activity was not sufficient to require recognition of the corporations as separate taxable entities. The district court therefore disregarded the existence of the…