Maloy v. Commissioner
United States Board of Tax Appeals
1. Under section 275(c) of the Revenue Act of 1934, in determining whether an amount in excess of 25 per centum of the income reported on the return of the taxpayer has been omitted, only the taxable portion of capital gains realized may be taken into account. 2. In 1916 and 1925 petitioner created trusts of which she was the beneficiary of the income for life, with remainder over to designated individuals. She retained only the power to direct investments by the trustee.
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1. Under section 275(c) of the Revenue Act of 1934, in determining whether an amount in excess of 25 per centum of the income reported on the return of the taxpayer has been omitted, only the taxable portion of capital gains realized may be taken into account. 2. In 1916 and 1925 petitioner created trusts of which she was the beneficiary of the income for life, with remainder over to designated individuals. She retained only the power to direct investments by the trustee. Held, that such power alone did not constitute a right to revoke the trusts and revest in herself the corpus, and…
1Opinion of the Court
*1106OPINION.
Leech :
We shall dispose first of the issue of the bar of the statute of limitations raised with respect to the deficiency determined for 1935. The two trusts in question were executed by petitioner in 1916. Under them she is entitled to the income of the trust corpus for life, with remainder over to her children. The deficiency asserted arises through the increase in her income for that year by the amount of the taxable capital gain received by the trustees upon a sale of certain trust assets, the entire proceeds of which sale have been retained as corpus and the percentage of gain…
2Cases cited3 opinions
- Helvering v. CliffordSupreme Court of the United States · 1940
- Freuler v. HelveringSupreme Court of the United States · 1934
- New York Life Insurance v. EdwardsSupreme Court of the United States · 1926
3Cited by17 opinions
- Roschuni v. CommissionerUnited States Tax Court · 1965
- George Slaff v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1955
- Estate of Klein v. CommissionerUnited States Tax Court · 1975
- Elwin Donald Brenneman, Margaret Zoe Hemmingson and Barbara Esterbrook v. Nancy Ruth Hockett Bennett and Elizabeth Anne Hockett MayerCourt of Appeals for the Eighth Circuit · 1970
- Johnson v. CommissionerUnited States Tax Court · 1959
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