Court Opinion

ID: 9637670
Source: CourtListenerOpinion
Date Created: 2023-08-22 15:14:53.167973+00
Date Added: 2024-06-11T18:09:58.921948
License: Public Domain

On Petition for Rehearing.
PER CURIAM.
The petition for rehearing must he denied. This case is not distinguishable in principle from the ease of Brewster v. Gage, 280 U. S. 327, 50 S. Ct. 115, 74 L. Ed. 457. In that case it was held that the son, the residuary legatee, acquired a vested interest in the residue of the estate at the time of his father’s death and that that was the date when he acquired the property within the meaning of section 204 (a) (5) of the Revenue Aet of 1926 (26 USCA § 935 (a) (5), although the title to the specific stocks constituting the residue vested in the executors on the father’s death and the son did not receive them until later. The residuary legatee in that case did not acquire a right to the particular stoeks. The shares of stock which the exeeutors received, they might have sold, if deemed necessary, either to make a gain or to' avoid a, loss; but if they sold and made a gain, their gain, under the provisions of the Revenue Aet, would have been the difference between the value of the stock at the time of the testator’s death and what they sold it for. The executors did not sell the stock; the specific shares were distributed to the residuary legatee; he sold the stock and his gain was held to be the difference between the value of those shares at the testator’s death and the price he received for them.
Suppose, in the instant case, the trustees, who acquired title to the stocks constituting the residue of Mrs. Chandler’s estate and to whom the shares of stock were delivered, had sold these shares. In such ease the trustees would have been taxable for the gain, if any, on the same basis as the executors in the Brewster Case would have been had they made a sale. But the trustees did not sell the stock. The shares came to John P. II. Chandler, who acquired a vested interest in his mother’s estate at the time of her death. He sold the stock; he made the gain; and, as was held in Brewster v. Gage, acquired the property, within the meaning of section 204 (a) (5) of the Revenue Act, at the time of his mother’s death. And this being so, the gain is determined by deducting the value at her death from the sum received from the sale. If these specific shares held by the mother at the time of her death had not come *16to Mr. Chandler, he eould not have sold them and made a gain and could not be taxed. But that has little to do with this case, for he did receive the stocks and sold them, and, by so doing, made a gain over and above their value at the. time of his mother’s death, which, according to Brewster v. Gage, was the time he acquired the property, within the meaning •.of section 204 (a) (5).
In our opinion filed January 3, 1933, we 'did -not outline these specific -matters in detail, but we considered them all and regarded them as fully covered by Brewster v. Gage, if Mr. Chandler acquired a vested interest at the date of his mother’s death, which we held ■he did.
The petition is denied.