Court Opinion

ID: 4498261
Source: CourtListenerOpinion
Date Created: 2020-01-23 18:15:51.411294+00
Date Added: 2024-06-11T15:04:13.830861
License: Public Domain

Opper,
dissenting: Eevenue Act of 1932, section 501 (c) provides:
The [gift] tax shall not apply to a transfer of property in trust where the power to revest in the donor title to such property is vested in the donor, * * * bUt * * * any payment of the income therefrom to a beneficiary other than the donor shall be considered to be a transfer by the donor of such income by gift.
Although this section was repealed by Kevenue Act of 1934, section 511, that action was not retroactive and can have no effect on two of the years, 1932 and 1933, which are before us here. Of greater *958and seemingly- controlling significance is the reason given for the repeal, which was:1 “Since the principle expressed in that section is now a fundamental part of the law by virtue of the Supreme Court’s decision in the Guggenheim Case.”2 In that case Mr. Justice Cardozo made it clear that where the power to revoke is retained no completed gift of principal or future income results. “As to the principal of the trusts and as to income to accrue thereafter the gifts were formal and unreal.” The opinion goes on to say that in making “deeds of gift after the Act of 1924” taxpayers “had the assurance of a Treasury regulation that the tax would not be laid, where the power of revocation was uncanceled, except upon the income paid from year to year” (Emphasis added.) If this statement of existing law was the reason for the repeal of section 501 (c), that action is no reason for failure to apply the gift tax to “the income paid from year to year.”
And since it was the payment of income “which was taxed as a transfer and not the transfer in trust, the statute was not retroactively applied”3 so as to contravene the prospective emphasis furnished by section 501 (b).
I respectfully dissent.
Disney and HaRRON agree with this dissent.

 H. Rept. No. 704, 73d Cong., 2d sess., p. 40, Sen. Rept. No. 558, 73d Cong., 2d sess., p. 50. And see Estate of Sanford v. Commissioner, 308 U. S. 39, 45.

 Burnet v. Guggenheim, 288 U. S. 280.

 Estate of Sanford v. Commissioner, supra, p. 43.