Document: 338 U.S. 692 70 S.Ct. 472 94 L.Ed. 478 UNITED STATESv.BENEDICT et al. No. 45. Argued Nov. 8, 1949. Decided Feb. 13, 1950. Mr. Arnold Raum, Washington, D.C., for petitioner. Theodore Pearson, New York City, respondents. Justice BURTON delivered the opinion of Court. 1 The question presented is whether trustees, who, in 1944, permanently set aside a charitable contribution from gains realized upon disposition capital assets held more than six months, were entitled, computing federal income tax trust, to deduct full amount contribution,1 although only half those taken into account net income.2 For reasons hereafter stated, our answer negative. 2 respondents are trustees trust created by will John E. Andrus. directs that be divided 100 parts, 55 paid certain individual beneficiaries and 45 Surdna Foundation, Inc., corporation.3 Pursuant terms Foundation 45% trust's fiscal year ended April 30, period involved this case. 3 In their fiduciary return, reported ordinary $240,567.73, deducted it, as contribution, $108,255.48 (45% income) which they had Foundation. This was done under § 162(a) Internal Revenue Code.4 also $60,374.01 on months. Of these gains, took 50%, amounting $30,187.01, taxable income. 117(b).5 An uncontroverted deduction $329.60, representing carry-over 1942 loss, reduced $29,857.41. From 45%, proportionate share amounted $13,435.83, leaving $16,421.58, $5,480.35 paid, plus interest. 4 1947 filed claim refund $5,157.41. They based 1946 decision Tax Court 1941 taxes nearly identical trust. Andrus Trust v. Commissioner, 7 T.C. 573. On basis, claimed aforesaid $29,857.41, not but entire contribution. increased $13,435.83 $29,857.41) $27,168.31 total $60,374.01), correspondingly $16,421.58 $2,689.10. 5 July, 1947, Appeals Second Circuit unanimously reversed case relating taxes. Commissioner Central Hanover Bank Co., 163 F.2d 208, certiorari denied, November, 332 830, 68 92 404. however, no action trustees' 1944 taxes, and, 1948, proceeding its recovery through Claims. With one judge dissenting, court decided favor. 81 F.Supp. 717, 112 Ct.Cl. 550. To resolve resulting conflict, we granted certiorari. 336 966, 69 940. 6 illustration facts instant bring statutory problem clearer focus. A realizes $60,000 during sale it makes 50%. Section Code6 provides may any part 'gross income' contributes such charity selected. 117(b)7 50% shall contend that, purposes, income,' $30,000 162(a), remaining left out force 117(b), thereby income, goes beneficiaries. contends recognized 117(b) constitutes necessarily other purposes income.' Beginning, thus, with gross allows attributable has been account. That amounts $15,000, $15,000. 8 narrow thus or constitute purposes. Stated conversely, taxpayer's way initial exclusion subsequent precise Code silent. No provision nothing legislative history administrative practice expressly settles course followed. We, therefore, seek applicable sections adopt construction best gives effect 9 We find obvious purpose encourage making contributions end, completely exempts tax, without limitations imposed made individuals corporations.8 served each constructions suggested parties. Under either method computation receive free tax. 10 then like except months computed would if Commissioner's solution accomplishes precisely result serves purpose. illustration, subject after $30,000. As is, taxing at substantially less taxed extent below percentage, fails give 117(b).9 extreme circumstances entirely eliminate 11 approve interpretation definition adopted Commissioner. treat words state 'shall * applying beginning statement concluding income.10 percentage excluded income.11 12 Accordingly, acceptance original return approved judgment Claims reversed. 13 Reversed. 14 BLACK JACKSON should affirmed gave. 15 DOUGLAS consideration 16 FRANKFURTER. 17 contrariety views expressed Court, Circuit, now task harmonizing §§ 22(a), Code, 26 U.S.C.A. conclusively proves opaqueness, inherent incongruity, provisions. Courts must do can materials since power write rewrite legislation theirs. But fact taxpayer astutely apply his so reduce base levied itself ground rejecting permits base, even though particular mode distributing have contemplated enactment classes exemptions deductions within brings himself. I, too, recoil bizarre ambiguous avoid result. rationale ought impact single instance. 18 applied disallowed merely because payment lower another made. Thus, where instrument all donations allocated doubtless same time report special provisions Code. secure very benefits sought taxpayers here. rule enunciated therefore rest liability astuteness shown drawing allocating 19 Since I am alone entertaining doubts dispelled, seems appropriate express them. '§ 162. Net 'The estate manner basis an individual, that— '(a) There allowed (in lieu charitable, etc., authorized section 23(o)) limitation, pursuant deed creating specified 23(o), used exclusively religious, scientific, literary, educational prevention cruelty children animals, establishment, acquisition, maintenance operation public cemetery operated profit; *.' (Emphasis supplied.) 53 Stat. 66, U.S.C. 162(a). 117. Capital losses '(b) Percentage Taken Into Account.—In taxpayer, corporation, following percentages gain loss exchange asset gain, income: '100 per centum months; '50 months.' 50—51, amended, 56 843, 117(b). contained kind aside, disputed properly proportionately indicate setting attempted allocate them gains. See Helvering Bliss, 293 144, 149—150, 17, 19, 20, 79 246, 95 A.L.R. 207; Grey Cir., 118 153, affirming 41 B.T.A. 234; Scott United States, 78 811, 815—816, 111 610, 618—620; Newbury 57 168, 102 192; Meissner 780; Estate Traiser 228; Montgomery, Federal Taxes, Estates, Trusts Gifts 179 (1948—1949); Nossaman, Administration Taxation 115—116 (1945). note 1, supra. 2, States Pleasants, 305 357, 363, 59 281, 284, 83 217; Old Colony Co. 301 379, 384, 813, 816, 1169; 147, 207. When 'without limitation,' read connection 13—15, 880, 826, 23(o) make inapplicable limitation 15%, otherwise might 234, 243, affirmed, 153. also, 382—384, 211; Frank 1931 145 411, 413; 192. comparable 5% corporations, see 15—16, 822, 23(g), 23(g). alternative provided 117(c)(2) consistent 51, 843—844, 117(c)(2), 117(c)(2). It unnecessary review intricate arguments terminology compel adoption preclude conclusion here reached. statute required earmark coming items issue does involve possible allocation rather requirement order deductible 411; Wellman Welch, 99 75; Tyler 255, 262—263. 210; supra; Green 263, 277; Maloy 1104, 1107.

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