Court Opinion

ID: 4479643
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:13:47.442276+00
Date Added: 2024-06-11T14:53:58.333138
License: Public Domain

Murdock, J., dissenting: A transfer in trust is recognized here solely for the purpose of giving a favorable basis, whereas the transfer would not be recognized in any other way for tax purposes. I think Congress did not refer in section 113 (a) (3) to this kind of a transfer in trust. It would not have been recognized as a transfer for gift tax purposes or for income tax purposes because of the grantors’ retained power to alter the beneficiaries and change the interests which they were to receive. The Bedford and Webster cases are different in this respect and, therefore, are distinguishable. The gift took place only when the property was removed from the trust. Therefore, it seems more appropriate to me to apply section 113 (a) (2). The value of the property at the time a gift was made, which was recognized for gift tax purposes, was no greater than the amount for which the property was thereafter sold, and no deduction for loss should be allowed. Smith, Arnold, and Hill, JJ., agree with this dissent.