Court Opinion

ID: 4481431
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:14:53.534145+00
Date Added: 2024-06-11T15:03:45.035144
License: Public Domain

Foekester, /., concurring: I agree with the majority both in rationale and result, however I feel compelled to emphasize as to the first issue that the seeming inequity which follows from our holding is not due to the statute, legislative intent, or a constrained interpretation of the law by this Court, but rather to the decision in Manufacturers Hanover Trust Co. v. United States, 410 F. 2d 767 (Ct. Cl. 1969), and to what can be termed at best, the extremely inept handling of Caryl’s estate by its administrators. In Manufacturers Hanover Trust Co., the court’s bolding that tbe sale of the securities was taxable in Caryl’s estate is based on the exceedingly strict, formalistic proposition that the act of sale was by her administrators. For all practical purposes, however, the equitable title to the stock was in Howard’s estate. It seems clear that (starting at some time before Howard’s death) Caryl’s estate had no further reason to remain in existence, and it follows that from this time forward, Howard, and then his estate, had a fully matured right to the stock in question. Under such circumstances it seems to me that the sale should have been considered as a sale by a constructive trustee for Howard’s estate, and only taxable there. See Judge Skelton’s dissent in Manufacturers Hanover Trust Co. v. United States, supra. Under such handling, the Federal estate tax liability would be determined on the value of the stock at the time of Howard’s death, and his estate would have received a stepped-up basis for the purpose of determining gain on sale of the stock, and no unfairness would have resulted. Fay, /., agrees with this concurring opinion.