Robin Haft Trust v. Commissioner of Internal Revenue

McENTEE, Circuit Judge:

In their federal income tax returns for the year 1967 the taxpayer trusts reported gains from the redemption of certain stock they owned as long-term capital gains. The Commissioner determined that the gains were ordinary income and asserted deficiencies of $17,-445.49 for each trust. The Tax Court found for the Commissioner and the taxpayers appeal. The issue before us is the relevance, after United States v. Davis, 397 U.S. 301, 90 S.Ct. 1041, 25 L.Ed.2d 323 (1970), of family hostility in mitigation of the constructive ownership rules of Code section 318 in…