Source: https://www.legalcrystal.com/case/96873/united-states-trust-co-vs-helvering
Timestamp: 2019-04-18 18:56:26+00:00

Document:
Appellant United States Trust Co.
1. An estate tax is not a tax upon the property of which an estate is composed, but is an excise upon the transfer of or shifting in relationships to property at death. P. 307 U. S. 60 .
2. The proceeds of a War Risk Insurance policy payable to a deceased veteran's widow were properly included in his gross estate for the purpose of computing the federal estate tax. Revenue Act of 1926, § 302(g), as amended. P. 307 U. S. 60 .
3. Section 22 of the World War Veterans' Act, 1924, providing that such insurance "shall be exempt from all taxation," does not prevent. P. 307 U. S. 59 .
4. No provision of the Government's contract with an insured veteran is impaired in violation of the Fifth Amendment by the inclusion in his gross estate of proceeds of a War Risk Insurance policy for the purpose of computing the federal estate tax. P. 307 U. S. 60 .
Certiorari, 305 U.S. 591, to review the affirmance of a decision of the Board of Tax Appeals sustaining a determination of a deficiency in federal estate tax.
"The statute provides for the inclusion in the gross estate of . . . [a]ll insurance [not for the benefit of an estate] . . . to the extent that it exceeds . . . forty thousand dollars. . . . The term 'insurance' refers to life insurance of every description. . . . [ Footnote 5 ]"
But petitioner invokes the provision of the World War Veterans' Act, 1924, that insurance thereunder "shall be exempt from all taxation." An amendment to that Act of August 12, 1935, [ Footnote 6 ] provides that "Payments of benefits due or to become due . . . shall be exempt from taxation. . . ." However, this amendment served only to clarify the original provision for exemption, without more. [ Footnote 7 ] Unless resort is had to enlargement by implication, this exemption means only that the proceeds or benefits of a War Risk policy are exempt from taxation.
An estate tax is not levied upon the property of which an estate is composed. It is an excise imposed upon the transfer of or shifting in relationships to property at death. [ Footnote 9 ] The tax here is no less an estate tax because the proceeds of the policy were paid by the Government directly to the beneficiary; the taxing power was nevertheless exercised upon "the transfer of property procured through expenditures by the decedent with the purpose, effected at his death, of having it pass to another." [ Footnote 10 ] In an analogous situation, Federal bonds exempt by statute from all taxation have been held subject to a Federal inheritance tax. [ Footnote 11 ] And State inheritance taxes can be measured by the value of Federal bonds exempted by statute from State taxation in any form. [ Footnote 12 ] Similarly, the statutory immunity of War Risk Insurance from taxation does not include an immunity from excises upon the occasion of shifts of economic interests brought about by the death of an insured.
§ 302(g) Revenue Act of 1926, as amended.
98 F.2d 734. State courts have differed as to whether proceeds of War Risk Insurance are subject to death duties imposed by the States. See, for example, In re Estate of Harris, 179 Minn. 450, 229 N.W. 781, Tax Commission v. Rife, 119 Ohio St. 83, 162 N.E. 390, Wanzell's Estate, 295 Pa. 419, 145 A. 512, Watkins v. Hall, 107 W.Va. 202, 147 S.E. 876 (holding these proceeds not subject to such excises), and Matter of Sabin, 224 App.Div. 702, 228 N.Y.S. 890, Matter of Dean's Estate, 131 Misc. 125, 225 N.Y.S. 543 ( contra ). In view of this fact and the importance of an authoritative interpretation of the Federal statutes involved, we granted certiorari. 305 U.S. 591.
See 44 Stat. 9, 21, 22, § 211; 48 Stat. 680, 684, 754, §§ 12, 405(a).
Lawrence v. Shaw, 300 U. S. 245 , 300 U. S. 249 .
New York Rapid Transit Corp. v. New York, 303 U. S. 573 , 303 U. S. 592 -593; Trotter v. Tennessee, 290 U. S. 354 , 290 U. S. 356 -357; J. W. Perry Co. v. Norfolk, 220 U. S. 472 , 220 U. S. 480 ; Chicago Theological Seminary v. Illinois, 188 U. S. 662 , 188 U. S. 672 .
Reinecke v. Northern Trust Co., 278 U. S. 339 , 278 U. S. 347 ; Chase National Bank v. United States, 278 U. S. 327 , 278 U. S. 334 ; United States v. Jacobs, 306 U. S. 363 .
Chase National Bank v. United States, supra, 278 U. S. 337 .
Murdock v. Ward, 178 U. S. 139 .
Plummer v. Coler, 178 U. S. 115 .

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