Pardee v. Commissioner
United States Tax Court
1. Decedent created a trust, naming himself as trustee, for the benefit of his children. The trustee was given the power to pay income or invade corpus in his discretion for the beneficiaries' education, maintenance, medical expenses, or other needs occasioned by emergency. In addition, the trustee was given the power to determine the division of the trust estate and to allocate receipts between principal and income.
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1. Decedent created a trust, naming himself as trustee, for the benefit of his children. The trustee was given the power to pay income or invade corpus in his discretion for the beneficiaries' education, maintenance, medical expenses, or other needs occasioned by emergency. In addition, the trustee was given the power to determine the division of the trust estate and to allocate receipts between principal and income. Held, that the trustee's power to distribute income or principal was limited by an external standard and not includable in his gross estate under sec. 2038(a)(1), I.R.C. 1954. 2.…
1Opinion of the Court
OPINION
Kespondent relies upon Code sections 2036(a)(1), 2036(a)(2),2 and 2038(a) (1)3 to support the inclusion of the Pardee Trust in the decedent’s gross estate. Kespondent contends that the entire corpus and accumulated income 4 would be includable under sections 2038(a) (1) and 2036(a) (2),but concedes that only a portion of the trust assets, as explained below, would be includable under section 2036 (a) (1). We have concluded that respondent is in error as to sections 2038(a) (1) and 2036 ('a') (2) but is correct as to section 2036(a) (1).
Under section 2038(a) (1), retention of a power by…
2Cases cited55 opinions
- Fawcus MacHine Co. v. United StatesSupreme Court of the United States · 1931
- United States v. O'MALLEYSupreme Court of the United States · 1966
- Estate of Daniel McNichol Deceased, Ellen McNichol Evangelista and Joseph G. McNichol Executors v. Commissioner of Internal RevenueCourt of Appeals for the Third Circuit · 1959
- McNichol v. CommissionerUnited States Tax Court · 1958
- Industrial Trust Co. v. Commissioner of Internal Rev.Court of Appeals for the First Circuit · 1947
50 more not listed; retrieve them via the Exa API.
3Cited by39 opinions
- United States v. ByrumSupreme Court of the United States · 1972
- Estate of Ford v. CommissionerUnited States Tax Court · 1969
- Lazarus v. CommissionerUnited States Tax Court · 1972
- Old Colony Trust Company, of the Estate of John H. Cunningham v. United StatesCourt of Appeals for the First Circuit · 1970
- Estate of Theodore Thompson, Deceased, Betsy T. Turner v. Commissioner of Internal RevenueCourt of Appeals for the Third Circuit · 2004
34 more not listed; retrieve them via the Exa API.