Early v. Commissioner
United States Tax Court
Petitioners acquired a joint life interest in a percentage of the income from an estate trust in exchange for their transfer to the trust of certain shares of stock transferred to them by decedent outside her probate estate. Held, the amortized cost of acquiring the life estate is deductible under sec. 167(a)(2), I.R.C. 1954. Held, further, that portion of the amortized cost allocable to tax-exempt interest income is not disallowed as a deduction by sec. 265, I.R.C. 1954.
1DissentTannenwald, J.
It is significant that the majority carefully refrains from resting its decision on a finding that the decedent made a valid completed gift prior to her death in a transaction separate from the settlement. Indeed, even though the endorsement of the stock certificates gave Early the power to transfer good title to a bona fide purchaser, the transaction was potentially subject to rescission as between Early and the decedent’s estate, since Early was not a bona fide purchaser in his own right. Compare art. 1302-6.07 with art. 1302-6.08, Tex. Rev. Civ. Stat. Ann. (1962). Eather, the majority…
2Cases cited23 opinions
- Crane v. CommissionerSupreme Court of the United States · 1947
- Lyeth v. HoeySupreme Court of the United States · 1938
- Trust Under the Will of Bingham v. CommissionerSupreme Court of the United States · 1945
- Commissioner v. Estate of NoelSupreme Court of the United States · 1965
- Helvering v. Safe Deposit & Trust Co. of BaltimoreSupreme Court of the United States · 1942
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