Busch v. Commissioner
United States Tax Court
Petitioners are beneficiaries of certain trusts the income of which is payable to them upon request. The settlor of such trusts wished to make additional gifts thereto of certain shares having a value of $ 2,800,000, but was unable to pay the $ 600,000 in gift taxes which would be due thereon and was unwilling to become personally liable on any indebtedness therefor. A bank agreed to loan $ 600,000 on the sole security of the shares.
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Petitioners are beneficiaries of certain trusts the income of which is payable to them upon request. The settlor of such trusts wished to make additional gifts thereto of certain shares having a value of $ 2,800,000, but was unable to pay the $ 600,000 in gift taxes which would be due thereon and was unwilling to become personally liable on any indebtedness therefor. A bank agreed to loan $ 600,000 on the sole security of the shares. Accordingly the settlor-donor transferred the shares in varying amounts to the several trusts, borrowed $ 600,000 from the bank, payable in 5 years, and executed…
1Opinion of the Court
OPINION.
KeRn, Judge:
The principal issue presented, in these proceedings is whether the Commissioner erred in his determination that the income from certain shares of stock held by the several trusts involved here, and applied by the trustees to the payment of the indebtedness for which the shares had been pledged as security prior to their transfer to the trusts, was, under the facts, taxable to the beneficiaries rather than to the trusts, as petitioners contend.
The secondary question, which will be resolved by our decision of the primary issue, concerns the validity of the penalty assessed…
2Cases cited6 opinions
- Helvering v. HorstSupreme Court of the United States · 1940
- Farmers' & Merchants' National Bank v. MosherNebraska Supreme Court · 1901
- Guarantee Co. of North America v. East Rome Town Co.Supreme Court of Georgia · 1895
- Gaty v. HollidayMissouri Court of Appeals · 1879
- Mandel v. North Hudson Investment Co.Supreme Court of New Jersey · 1933
1 more not listed; retrieve them via the Exa API.
3Cited by1 opinion
- Busch v. CommissionerUnited States Tax Court · 1944