Court Opinion

ID: 4620304
Source: CourtListenerOpinion
Date Created: 2020-11-21 02:42:22.205357+00
Date Added: 2024-06-11T08:00:01.809634
License: Public Domain

ESTATE OF A. M. BERRY (ALSO KNOWN AS A. MARCELLUS BERRY), DECEASED, HOPE C. BERRY, EXECUTRIX, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.  HOPE C. BERRY, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.Berry v. CommissionerDocket Nos. 102116, 102117.United States Board of Tax Appeals44 B.T.A. 1254; 1941 BTA LEXIS 1205; August 15, 1941, Promulgated *1205  Decedent and his wife were married in 1910 and until the date of his death in 1936 they lived in the State of Washington, a community property state.  Decedent was employed by Sears, Roebuck & Co. and in 1916 became a participant in its employees' savings and profit sharing pension fund.  The regulations governing operation of the fund provided for contributions to the fund by employer and employee.  Employees who had participated in the fund for at least ten years might withdraw the full amounts credited to them in the fund but upon withdrawal could not reenter the fund.  The trustees of the fund purchased stock of the employer with contributions to and profits of the fund.  The accounts of participants in the fund were annually credited with the contributions and earnings of the fund.  In 1931, 1934, and 1935 decedent pledged stock credited to his account in the fund as collateral for loans.  Neither decedent nor his wife ever reported as income credits to decedent's account in the fund before 1936.  In 1936 decedent died.  Held, the total amounts credited to decedent's account in the fund in excess of contributions by decedent are taxable to him and his surviving wife in the*1206  year of his death.  Dillis C. Knapp,41 B.T.A. 23">41 B.T.A. 23, followed.  George W. Williams, Esq., and Wallace O. Greig, C.P.A., for the petitioners.  B. H. Neblett, Esq., for the respondent.  HILL*1254  Respondent determined deficiencies for the year 1936 in the income taxes of decedent, A. M. Berry, and of Hope C. Berry, his surviving wife, in the amounts of $3,033.27 and $4,017.34, respectively.  The sole issue before the Board is whether or not amounts credited in previous years to the account of decedent in a profit sharing, savings, and pension *1255  fund were taxable to decedent and his surviving wife in the year of decedent's death.  The proceedings were consolidated for hearing.  The facts were in large part stipulated.  Evidence of facts not stipulated consists of documentary exhibits admitted in evidence without objection.  FINDINGS OF FACT.  The facts stipulated are incorporated in our findings of fact, whether or not fully set out herein.  A. M. Berry, also known as A. Marcellus Berry, hereinafter referred to as decedent, died in Seattle, King County, Washington, on June 13, 1936.  On June 25, 1936, Hope C. *1207  Berry was duly appointed executrix of decedent's last will and testament in the Superior Court of the State of Washington for King County, and thereupon immediately qualified as such executrix.  At all times since appointment Hope C. Berry has been and now is the duly appointed, qualified and acting executrix of the estate of decedent.  Hope C. Berry is petitioner individually in docket No. 102117 and petitioner as executrix of the estate of decedent in docket No. 102116, and is hereinafter usually referred to as petitioner.  She resides at 3620 East Prospect Street, Seattle, Washington.  The income tax returns here involved were filed with the collector for the district of Washington on or about March 15, 1937.  All returns of decedent and petitioner for the taxable year and all previous years were prepared on the basis of cash receipts and disbursements.  Hope C. Berry and decedent were married on February 3, 1910, and at all times thereafter up to the date of the death of decedent were husband and wife and residents of the State of Washington.  Decedent became employed by Sears, Roebuck & Co., a corporation, hereinafter sometimes referred to as Sears, in the year 1900 and*1208  was thereafter continuously in the service of Sears until the date of his death.  All of such employment after February 3, 1903, was within the State of Washington.  On or about July 1, 1916, Sears established the "Sears, Roebuck and Co.'s Employes' Savings and Profit Sharing Pension Fund," an unincorporated organization, hereinafter known as the fund, which has remained in existence continuously at all times herein material.  At all times herein material, the fund was operated under certain articles, of which the following are pertinent: ARTICLE I.  Purpose.  In order that the employes may share in the profits of this business, and to encourage the habit of saving, the Company has decided to contribute annually beginning with the fiscal year 1934, to the fund known as Sears, Roebuck and *1256  Co.'s Employes' Savings and Profit Sharing Pension Fund, a sum equal to five per cent (5%) of the combined net profit of the Company - mail order, retail and factories now owned outright, each year, without deductions for any dividends or for Federal income taxes, as shown by the annual audit of its books.  It is intended that this plan will furnish to those who remain in the*1209  employ of the Company until they reach the age when they retire from active service, a sum sufficient to provide for them thereafter, and that even those who achieve a long service recore, but who may not remain with the Company all of their business life, will have accumulated a substantial sum.  This Savings and Profit Sharing Pension Fund will enable an employe to secure an income for himself after the close of his active business career or, in case of his death, for his family.  ARTICLE II.  Eligibility.  Participation will be entirely voluntary.  Every employe of Sears, Roebuck and Co., regardless of position, who has completed three years of continuous service, shall be eligible to participate in this fund so long as he remains such employe.  ARTICLE III.  Contributions to the Fund.  An employee in order to participate must deposit in the fund five per cent (5%) of his salary; provided that no employe may deposit in the fund five per cent cent (5%) of his salary and in no case more that Two Hundred and Fifty Dollars ($250.00) per annum this limit being deemed advisable so that the higher salaried employes may not too largely participate in the fund.  The Company*1210  will contribute a sum equal to five per cent (5%) of the combined net profit of the Company - mail order, retail and factories now owned outright, each year, without deductions for any dividends or for Federal income taxes, as shown by the annual audit of its books.  ARTICLE IV.  Participation in the Profits.  The contributions of the Company will be made annually as soon after the first of each year as an audit of the books will permit.  For the purpose of participation by the depositors in the contributions of the Company, the depositors will be deemed to be divided into three groups as follows: Group A - Consisting of depositors who have been in the service of the Company for less than five years; Group B - Consisting of depositors who have been in the service of the Company for five years and less than ten years; and Group C - Consisting of depositors who have been in the service of the Company for ten years or more.  The contributions of the Company when made will be credited pro rata to the depositors respectively, based upon their respective deposits during the preceding year, except, that the participation of depositors in Group B shall be based upon two times their respective*1211  deposits during the preceding year, and that the participation of depositors in Group C shall be based on three times their respective deposits during the preceding year.  *1257  ARTICLE V.  Withdrawals.  SECTION 1.  A depositor who has completed ten years of service will be entitled to withdraw all money and securities credited to his account, including the Company's contributions, as hereinafter provided.  SEC. 2.  A depositor who has not completed ten years of service will be entitled to withdraw only the amount he has deposited in cash, plus interest at five per cent per annum, compounded semi-annually, and no more, except in the case of a woman depositor who, after five years' service, leaves to become married, in which case she will be entitled to her full share in the fund, in money and securities credited to her account, including the portion contributed by the Company, as hereinafter provided; and except in the case of the death of a depositor while in the service of the Company, in which case his estate, or such beneficiaries as he may designate, will be entitled to the full amount credited, in money and securities, including the contributions of the Company, *1212  as hereinafter provided and except that whenever a depositor is dismissed from service by the Company before completing ten years of service, and the Company, by one of its officers, shall certify in writing to the Board of Trustees that such dismissal was not by reason of any unsatisfactory work, attitude, nor deportment, then such depositor will be entitled to his full share of the Fund in money and securities credited to his account, including the portion contributed by the Company, as hereinafter provided.  SEC. 3.  A depositor shall withdraw upon ceasing to be an employe of the Company, or upon failing to regularly make his deposit.  SEC. 4.  A depositor who once withdraws cannot re-enter the fund.  SEC. 5.  In any case of withdrawal where a depositor is entitled to share in the contributions of the Company, he will receive either (a) the full amount to his credit, as shown by the accounting for the preceding year, plus such sums as the depositor may have deposited during the current year, with interest at five per cent per annum, or (b) his full pro rata share of the securities and uninvested moneys of the fund, at the option of the Trustees.  SEC. 6.  Loan will be*1213  made to depositors in cases of actual necessity and when in the opinion of the Trustees the circumstances warrant it.  SEC. 7.  Any employe who has been a depositor for ten (10) full years may, if he desires, withdraw in stock or its equivalent in cash at the closing market quotation on the date of his application for withdrawal, at the option of the Trustees, such sum or sums from time to time as shall not in the aggregate exceed one-half (1/2) of the Sears, Roebuck and Co. stock credited to his Fund account for the year or years subsequent to the time he shall have been a depositor for ten (10) full years.  * * * [Although these articles were amended from time to time, the above quoted provisions, in so far as material herein, were unchanged except as to amounts of contribution and participation.] In accordance with the articles of the fund, decedent made regular contributions from his salary to the fund beginning with the inception of the fund and continuing up to the time of his death in June 1936.  In addition thereto Sears made regular contributions to the fund in accordance with the terms of the articles.  These contributions were *1258  from time to time invested*1214  in stock of Sears.  The profits and earnings of the fund were also invested in Sears stock.  Annual statements were furnished to decedent each year during the period from 1916 to 1936, inclusive, in substantially the following form: Sears, Roebuck and Co., Employees' Savings and Profit Sharing Pension Fund.  December 31, 1922.  A. M. BERRY.  Appended herewith is a statement of your account, showing the amount of money with which you have been credited this year, in accordance with the plan, and also the number of shares of Sears, Roebuck and Co. common capital stock in which all money so credited to your account has been invested.  JULIUS ROSENWALD, ALBERT H. LOEB, O. E. DOERING, JOHN H. MULIEN, MAY MIDDLETION, Trustees.Balance December 31, 192127 076/1000 sharesEarnings for 1922$29.50Savings for 1922150.003 552/1000 sharesCompany's contribution for 1922108.00Balance December 31, 192230 628/100 sharesThe total savings deposited by you since you joined the Fund amount to $975.00 and are included in the balance shown.  These annual statements, in similar form, which were furnished decedent throughout the years*1215  1916 and 1935, inclusive, were as follows: YearEarningsSavingsCompany's contributionsSharesBalance191675.00231.751 736/1000$ 306.75Shares191733.91150.00453.004 253/10005 989/10001918129.38150.00489.004 986/100010 975/10001919136.97150.00421.503 505/100014 480/10001920247.75150.00160.503 827/1000Div. 1 24 099/10005 792/1000192184.10150.002 977/100027 076/1000192229.50150.00108.003 552/100030 628/1000192325.72150.00237.004 824/100035 452/10001924152.082 5,540.003,747.6037 590/100073 042/10001925883.80300.001,458.0015 632/100088 674/100019261,340.74300.001,356.0058 449/1000354 696/1000413 145/100019271,425.34300.001,326.0048 976/1000462 121/100019281,536.78300.001,134.0030 360/1000Div. 501 769/10009 288/100019291,874.48300.96848.6921 806/1000Div. 543 945/100030 371/10001930603 458/100019311,643.60300.04300.0444 409/1000Div. 659 995/100012 128/10001932824.98323.1224 536/1000684 531/10001933702 532/10001934250.00270.0012 424/1000714 956/100019351,408.46250.00360.0043 229/1000758 185/1000*1259  On June 6, 1931, decedent was indebted to the Seattle First National Bank of Seattle (formerly First Seattle Dexter Horton National Bank) in a sum in excess of $30,000, evidenced by promissory notes.  On that date, decedent, as collateral security for the indebtedness, assigned to the bank all of his right, title, and interest in and to 603.458 shares of capital stock of Sears then credited to him*1216  in the fund.  Decedent had previously executed and delivered to the bank, on November 18, 1929, a general collateral agreement, of which the following is material: In consideration of financial accommodations given or to be given to the undersigned by FIRST SEATTLE DEXTER HORTON NATIONAL BANK (herein called "the bank"), and as collateral security for the payment of any and all indebtedness and liabilities of the undersigned to the bank, now or hereafter existing, matured, or to mature, absolute or contingent, primary or secondary, and wherever payable, the undersigned does hereby assign, transfer and pledge to the bank all property of the undersigned now or hereafter in the possession of the bank, including but without in any way limiting the foregoing, all moneys, chattels, evidences of indebtedness or liability, bonds, stocks, warrants, securities, bills of lading, warehouse receipts, policies of insurance, commercial paper, credits, choses, claims and demands of every kind, collections, bank deposits general and special, mortgages, contracts, property deposited for safe keeping or other purposes and property in safe deposit boxes, property coming into the hands or under the control*1217  of the bank or its agents, correspondents and employes in any way, or in transit to or from the bank, and any property which is now held by the bank or which may now or hereafter be delivered by the undersigned to the bank as collateral for any specific indebtedness or otherwise.  * * * On or about February 1, 1934, decedent executed in writing and delivered to the trustees of the fund his promissory note in the sum of $25,175.25, payable on or before January 28, 1935, with interest at 4 percent per annum.  In order to secure the note decedent and petitioner executed in writing and delivered to the trustees an agreement whereby they pledged to the trustees as security therefor 603 shares of capital stock of Sears credited to decedent in the fund.  This agreement, in part, provided as follows: WHEREAS, the rules and regulations of said Pension Fund provide that the Trustees thereof will make loans to depositors in said Pension Fund in cases where, in the opinion of said Trustees, the circumstances warrant the making of such loans; and WHEREAS, the Trustees of said Pension Fund did, on Frbruary 1, 1934, make a loan to the undersigned in the amount of Twenty-five thousand, one hundred*1218  seventy-five dollars and twenty-five cents ($25,175.25), which loan is evidenced by a promissory note in that amount executed by said A. M. BERRY payable on or before January 28, 1935, together with interest thereon at the rate of four per cent (4%) per annum; NOW, THEREFORE, in consideration of the premises and of the making of the aforesaid loan and as collateral security for the payment of the aforesaid note, the undersigned, A. M. BERRY, hereby sells, transfers, conveys, sets over and *1260  assigns unto the Trustees of said Pension Fund six hundred three (603) of said shares of the capital stock of Sears credited to the undersigned in said Pension Fund as aforesaid, which six hundred three (603) shares of stock the undersigned hereby gives the Trustees of said Pension Fund, their agents or assigns, authority to sell, or any part thereof, on the maturity of the aforesaid note, or at any time thereafter, or before in the event of said stock depreciating in value, in the opinion of said Trustees, at public or private sale, at the discretion of said Trustees, or their assignee, without advertising the same, or demanding payment, or giving the undersigned any notice, and to*1219  apply so much of the proceeds thereof to the payment of said note as may be necessary to pay the same, with all interest due thereon, * * * Thereafter, on February 5, 1934, upon the receipt of $25,175.25, the bank released all of its interest in and to the shares of Sears stock in the fund.  On April 24, 1935, decedent borrowed from the trustees of the fund, in addition to the sum of $25,175.25 previously borrowed and $1,236.37 interest thereon, all of which was unpaid, the sum of $47,878.16.  As collateral security therefor decedent and petitioner executed in writing and delivered to L. J. Rosenwald, R. E. Wood, ,T. J. Carney, John H. Mullen, and M. C. Penticoff, trustees of the fund, their agreement whereby they pledged 715 shares of capital stock of Sears standing to the credit of decedent in the fund, together with all shares of stock and moneys thereafter credited to decedent in the fund until the repayment of the whole amount of the loan to the fund, together with all their interest in other collateral then pledged to the First National Bank of Seattle to secure indebtedness then owing the bank.  This agreement contained provisions similar to those in the agreement for the*1220  pledge of 603 shares of Sears stock, pertinent provisions of which are quoted above.  On January 28, 1936, the indebtedness not having been paid to the trustees of the fund, decedent executed a renewal note and delivered the same to the trustees, and decedent and petitioner executed in writing and delivered to the trustees of the fund an agreement whereby they pledged as security for the indebtedness, in addition to the collateral pledged in the agreement of April 24, 1935, shares of capital stock in four other corporations, together with additional shares of capital stock of Sears.  This indebtedness remained unpaid and all of the property pledged to secure the same remained pledged up to and after the death of decedent.  At the time of decedent's death 758 shares of Sears stock had been credited to him by the fund.  On September 8, 1937, a decree of distribution of the estate of decedent was entered in the Superior Court of the State of Washington for King County in cause No. 64767, in which decree the title to the 758 shares of capital stock of Sears was confirmed in Hope C. Berry.  After the death of decedent Hope C. Berry individually and as executrix of decedent's will borrowed*1221  from the Seattle First National Bank sufficient funds to pay the balance *1261  due and owing the fund, and to secure the same repledged the 758 shares of Sears stock received from the fund.  That indebtedness was paid to the bank on or about May 16, 1940, and petitioner still owns and possesses all of the shares and has not sold any of them.  The market price upon the New York Stock Exchange of Sears stock covered the following range during the years 1929 to 1935, inclusive: YearHighLow1929181801930-31100 5/830 1/4193237 5/89 7/819334712 1/2193451 1/431193569 7/831Neither petitioner nor decedent ever reported as income of any year the value of any shares of Sears stock credited to them or their account in the fund by Sears.  The facts concerning the participation of decedent and his wife in the fund were not revealed or reported to the respondent by them or either of them prior to the date of filing of the returns for the taxable periods herein involved.  The deficiencies in controversy are based upon the alleged receipt by the marital community of decedent and his wife of 758 shares of Sears stock at $74.58 a*1222  share and of $819.30 cash from the fund.  There is no controversy as to the correctness of these figures.  OPINION.  HILL: The sole issue before us is whether or not amounts credited to decedent's account in the fund are taxable to decedent and his surviving wife, Hope C. Berry, for 1936, the year in which decedent died.  Petitioner contends that the credits to decedent's account were taxable to decedent in the years credited to his account by the trustees of the fund and not in 1936.  She urges that those amounts were "made available" to decedent and could have been withdrawn by him at any time subsequent to 1926, the year in which decedent completed his tenth year of participation in the fund.  Petitioner further contends that, in any event, the shares of Sears, Roebuck & Co. stock were made available to decedent when he pledged the stock to the bank in 1931 or to the trustees of the fund in 1934 and 1935.  Petitioner contends, in the alternative, that the fund was in fact a plan for the purchase of stock so that decedent merely obtained the benefit of a bargain purchase.  Petitioner asserts that the death of decedent did not cause the stock and cash credited to him to become*1223  available to or be distributed to his surviving spouse within the meaning of section 165 of the Revenue Act of 1936.  Finally, petitioner maintains that, since a portion of the stock which *1262  was credited to decedent's account was derived from stock dividends, that portion could not be taxed to decedent or to Hope C. Berry because stock dividends were not taxable prior to the year 1936.  Respondent argues that the amounts credited to decedent's account in the fund did not become available to him and were not distributed to him prior to 1936.  He argues further that petitioner is barred by equitable estoppel from claiming that the amounts credited to decedent's account were taxable in the years credited rather than in the taxable year.  The question of whether the amounts credited to decedent's account by the trustees of the fund were taxable in the years credited or in the taxable year must be determined by reference to section 219(f) of the Revenue Acts of 1921, 1924, and 1926, and section 165 of the Revenue Acts of 1928, 1932, and 1934.  Although there were minor changes in the phraseology used in the corresponding sections of those acts, we believe that the differences*1224  are of no moment so far as these proceedings are concerned.  Section 165 of the Revenue Act of 1928 and section 165 of the Revenue Act of 1934 are set out in the margin below. 1*1225 The same fund which we are here considering was previously before us in . In that case we held that a participant in the fund was not taxable on credits to his account in the fund until the amounts were actually distributed to him on severance of his employment with Sears, Roebuck & Co.  Our holding was that no part of the credits was constructively received by him or "made available" to him so as to be subject to income tax in any year prior to the year in which he withdrew from the fund.  After determining that the doctrine of constructive receipt was not applicable, we stated: * * * The record clearly demonstrates that his right to continue to participate was a valuable one, the loss of which would have been a serious loss.  It *1263  was unlike the ordinary investment.  The company was annually making and was required to make substantial contributions to the credit of each participant based upon the amount of his deposits.  Only by surrendering his right to further share in such contributions could the petitioner withdraw all of his participation from the fund.  He had to surrender his entire right in what was obviously to*1226  him a very profitable and desirable opportunity as long as he could possibly remain a participant in it.  It is difficult to conceive of a more important limitation or condition upon a right to receive money than the one which attached to the right of this petitioner.  * * * Congress, in enacting section 219(f) and section 165, above cited, relieved the participants in employees' trusts of income tax until they had actually received their profits in cash or its equivalent.  Prior to that time they might not have had any funds with which to pay the tax.  Although the tax upon the entire profit at final distribution may be in excess of what the tax would have been if imposed upon the annual accretions, this circumstance is unimportant in view of the clear language of the statute.  * * * Petitioner, however, contends that the instant proceedings differ from the knapp case in that here decedent exercised control over the credits to his account in the fund so that they may be said to have been "made available" to decedent in the years 1931, 1934, or 1935.  Thus, although we said in *1227 , that the credits were not "made available" to the participant while the right to withdraw credits from the fund was subject to a condition that upon withdrawal he could never become a participant in the fund again, petitioner here claims that such condition did not obtain under the facts of this case.  In other words, petitioner here claims that the credits to decedent's fund account were available to him prior to the taxable year without a forfeiture of his right to continue participation in the fund.  In support of this contention petitioner cites the fact that decedent pledged the credited securities in 1931, 1934, and 1935 as security for loans and continued to participate in the fund.  The pledging of the credited securities as collateral for loans did not operate to distribute or make available to decedent the securities pledged within the meaning of section 165, supra. The pledged securities remained in the fund until decedent's death.  Only by withdrawal of such credits could they have been distributed or made available to decedent in his lifetime.  Decedent at no time made or applied for partial withdrawal under section 7 of article*1228  V of the articles governing the fund and there is no provision in such articles which would entitle him totally to withdraw the credits of his account without forfeiting his right to future participation in the fund.  This limitation led us to our decision in the Knapp case.  Decedent elected to continue his participation in the fund and not until his death did he cease to so participate.  So long as that election stood, he could not withdraw the amount of his credit and hence while such election stood his credits of cash and securities were neither distributed nor available to him.  *1264  Decedent could have exercised, but did not, the right of partial withdrawal under section 7 of article V of the articles governing the fund without losing his right to further participate in the fund.  However, such partial withdrawal would have reduced the quantum of his future participation in the fund and consequently would have required the surrender of such economic or financial advantage as the reduction in participation should entail.  Also, such partial withdrawal could have been made only upon his making application therefor.  He made no such application.  Such right of withdrawal, *1229  unless exercised, did not effect a segregation or setting apart from the fund of any part of decedent's prorated credits therein.  The right was not self-executing to effectuate such result.  The credits, in the absence of an application for their withdrawal, remained in the fund as a part thereof under the control and operation of its trustees.  The fund was administered as a whole, regardless of the credits therein of individual participants, and the earnings and profits in a current year plus the contributions to the fund in such year inured to the fund as a whole, but were credited to the participants to designate their respective pro rata interests therein.  The fund remained intact, notwithstanding the whole thereof was credited pro rata to participants, until a withdrawal was made by a participant of all or part of the maount of his credits.  The trustees had no power to distribute the fund, or any part of it, on their own initiative.  Hence, until a participant exercised his right of withdrawal from the fund, his credit therein represented only a pro rata equitable interest which was not available to him.  We hold that there was no withdrawal of any part of decedent's credit*1230  prior to his death and that prior to such time no part thereof was distributed or made available to him.  Petitioner's contention that the fund was in fact a stock purchase plan is unfounded.  Reference to the articles governing the operation of the fund will demonstrate that the fund is specifically directed at savings, profit sharing, and pensions and that the investment in Sears stock was merely to further the accomplishment of this triple purpose.  We see no merit in petitioner's contention that decedent's death had no effect in determining the time or the fact of the taxability to the petitioner, Hope C. Berry, of the credits in decedent's fund account.  Under section 2 of article V of the articles of the fund the death of the decedent ipso facto effected a withdrawal from the fund of the amount of decedent's credits therein and thereupon the securities and cash so credited became available to decedent's personal representative and his surviving wife, Hope C. Berry.  To the extent that the 758 shares of stock and cash credited to decedent at the time of his death represented income, it was community income of decedent *1265  and his surviving wife, realized for tax*1231  purposes during the lifetime of decedent, and was taxable one-half to each of the spouses individually in the year of decedent's death.  The fact that the stock and cash credited to decedent at his death was community property properly includable in the community estate of decedent and Hope C. Berry for administration under the laws of Washington in no way affects the taxability of the income represented thereby as above indicated.  Petitioner's contention that decedent's credits had their source in part in nontaxable stock dividends and to that extent are not taxable is without merit in view of our holding that the income here taxable is of the cash plus the value of the stock made available to petitioner of the death of decedent, less the total of the amounts contributed by the death of decedent, less the total of the amounts contributed by him to the fund, is taxable income under section 165, supra, regardless of its derivation.  In view of our holding as hereinabove indicated, it is unnecessary to consider the question of estoppel presented by respondent.  Decision will be entered for the respondent.Footnotes1. Dividends shown are stock dividends.  ↩2. Sic.↩1. SEC. 165.  [Rev. Act 1928.] EMPLOYEES' TRUSTS.  A trust created by an employer as a part of a stock bonus, pension, or profit-sharing plan for the exclusive benefit of some or all of his employees, to which contributions are made by such employer, or employees, or both, for the purpose of distributing to such employees the earnings and principal of the fund accumulated by the trust in accordance with such plan, shall not be taxable under section 161, but the amount contributed to such fund by the employer and all earnings of such fund shall be taxed to the distributee in the year in which distributed or made available to him.  Such distributees shall for the purpose of the normal tax be allowed as credits against net income such part of the amount so distributed or made available as represents the items of dividends and interest specified in section 25(a) and (b).  SEC. 165.  [Rev. Act 1934.] EMPLOYEES' TRUSTS.  A trust created by an employer as a part of a stock bonus, pension, or profit-sharing plan for the exclusive benefit of some or all of his employees, to which contributions are made by such employer, or employees, or both, for the purpose of distributing to such employees the earnings and principal of the fund accumulated by the trust in accordance with such plan, shall not be taxable under section 161, but the amount actually distributed or made available to any distributee shall be taxable to him in the year in which so distributed or made available to the extent that it exceeds the amounts paid in by him.  Such distributees shall for the purpose of the normal tax be allowed as credits against net income such part of the amount so distributed or made available as represents the items of dividends and interest specified in section 25(a). ↩