Document: 35 L.Ed.2d 247 93 S.Ct. 880 410 U.S. 257 UNITED STATESv.Edward G. CHANDLER and Esther F. Born, etc. No. 72—438. Jan. 22, 1973. PER CURIAM. 1 This case presents a narrow federal estate tax issue: Does registered co-owner of United States Savings Bond, Series E, by physical inter vivos delivery the bond to other co-owner, with intent effectuate gift, but without reissuance bond, succeed in divesting himself incidents ownership so that, at his subsequent death, value is not includable gross under joint interests provisions § 2040 Internal Revenue Code 1954, 26 U.S.C. 2040? 2 The District Court for Northern California ruled that had accomplished this divestiture, it rendered judgment favor taxpayer-estate. 312 F.Supp. 1263 (D.C., 1970). Appeals Ninth Circuit affirmed reasons set out Court's opinion. 460 F.2d 1281 (9 Cir., 1972). Sixth therefore held contrary on fact situation similar present case. Estate Curry v. States, 409 671 (6 1969). There are decisions like effect. Elliott Commissioner, 57 T.C. 152 (1971), reviewed court now pending appeal Fifth Circuit; Chambless 70—1 USTC 12,655, 25 A.F.T.R.2d 70—1512 (SC Third Circuit, however, previously sweepingly along lines followed here. Silverman McGinnes, 259 731 (3 1958). 3 We grant certiorari reverse. 4 * decedent, Mary E. Baum, purchased several Bonds, 1954. She them issued familiar co-ownership form. Some were names Mrs. Baum 'or' Patricia Ritter, granddaughter. Others Beatrice another In 1961 decedent delivered these bonds respective granddaughters, intention making complete, irrevocable, gifts.1 5 died 1962. At her death still original They been redeemed. Neither they reissued, as might have applicable regulations, graddaughters sole owners. 6 respondents, who executors decedent's will, disclosed return filed did include estate. On audit, Service includable. A resulting deficiency was assessed paid respondents. suit refund attributable inclusion instituted due course. II 7 Section governing statute. time section provided there shall be included estate, exceptions here pertinent, 'the all property . extent interest therein tenants any person their payable either or survivor. .' 8 Title 31 757c(a)2 authorizes Secretary Treasury issue Bonds 'in such manner subject terms conditions consistent subsections (b)—(d) section, including restrictions transfer, may from prescribe' (emphasis supplied). 9 Pursuant authorization, Regulations Bonds. first those appeared Department Circular 571, dated December 16, 1936, Fed.Reg. 2165. revised time. eighth revision effect when question granddaughters. 10 315.5 Regulations, CFR (1959 revision), 'form registration used must express actual will considered conclusive interest.' 315.7 authorized two persons alternative co-owners, stated, 'No form establishing authorized.' 11 315.15 imposed limitation transfer: 'Savings transferable except specifically regulations 315.20(a) judicial determination recognized which would give an attempted voluntary transfer 315.60 savings paid, during lives both 'to upon separate request,' 'shall cease bond,' request both, 'name either, alone new beneficiary,' if, reissuance, co-owners possessed one number enumerated relationships, 'grandparent grandchild.' 12 351.61 related payment reissue after co-owner. survivor 'as absolute owner,' 'made though name alone,' supported proof 13 thus made jointly nontransferable itself permitted change ownership, long alive, only through co-owners. III 14 here, whatever reason been, chose reissued she done pursuant regulations. Instead, merely granddaughters donative intent. Our whether delivery, accompanied intent, sufficient remove conclude not. 15 no rule against integrity issuance Secretary, 'restrictions transfer' prescribe, clearly Congress 757c(a). And just spelled No claim made—and none could made—that unclear inapplicable Baum's purported transfers. Nor can we view undue improper restriction rights otherwise have. restrictions, eyes law least, known her. originally grandchildren, and, later attempts reveal, retain possession them. Having so, obligated play game according rules. 16 below also overlook facts until retained right redeem each question, proceeds if survived putative donee, join veto attempt reissued. §§ 315.61 revision).3 17 note, passing, well lead chaotic respect great potential abuse. Millions requirements Government uniformity proper recordkeeping demand justify something less than freedom transfer. Considerations safety aspect permanency investment additional factors same result. 18 conclusion, feel, required holding Free Bland, 369 663, 82 1089, 180 (1962). absent fraud, creating survivorship overrode pre-empted inconsistent state law. stressed there, do result fail term condition issued.' Id., 669, S.Ct., 1094. see nothing earlier Bank America National Trust & Assn. Parnell, 352 29, 77 119, (1956), implies anything contrary. That distinguished U.S., 1093—1094. 19 Reversed. It stipulated deliveries contemplation death. 2035 1954 Code, 2035, relating transfers has application. 22(a) Second Liberty Bond Act, 40 Stat. 288, added Act Feb. 4, 1935, 49 21, amended Public Debt 1941, 55 7. Court, adopting opinion, stated 'reissued even signature other.' 1263, 1268. ignores positive requirement 'upon both.' its petition, p. 8, asserts approximately 500 million E outstanding, worth over 50 billion dollars, 75% coownership

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