Court Opinion

ID: 6921687
Source: CourtListenerOpinion
Date Created: 2022-07-23 23:04:08.943036+00
Date Added: 2024-06-11T16:06:49.086404
License: Public Domain

BREITENSTEIN, Circuit Judge
(concurring in result).
Section 811 of the 1939 Internal Revenue Code provides for the determination of the value of the gross estate of a decedent for federal estate tax purposes. Among other things, it requires1 the inclusion of property “(1) to the extent of any interest therein of which the decedent has at any time made a transfer (except in case of a bona fide sale for an adequate and full consideration in money or money’s worth), by trust * * * (B) under which he has retained for his life or for any period not ascertainable! without reference to his death (i) * * the right to income from, the property * # -»»
Trustor-decedent in 1932 created an irrevocable trust and received no consideration therefor. She retained for life the right to income from ^ths of the property which she placed in the trust. By the plain language of the statute that portion of the property held in the trust and devoted to the payment to her of income for life is includible within her gross estate. Such property is an “interest” of which she made a transfer with the retention of income for life.
The fact that the transfer of the life estate left her without any retained right to income from the trust property does not alter the result. As I read the statute the tax liability arises at the time of the inter vivos transfer under which there was a retention of the right to income for life. The disposition thereafter of that retained right does not eliminate the tax liability. The fact that full and adequate consideration was paid for the transfer of the retained life estate is immaterial. To remove the trust property from inclusion in decedent’s estate there must be full and adequate consideration paid for the interest which would be taxed. That interest is not the right to income for life but the right to the property which was placed in the trust and from which the income is produced.
As the 1932 trust was irrevocable, trustor-decedent could thereafter make no unilateral transfer of the trust property. Granting that she could sell her life estate as that was a capital asset *919owned by her,2 such sale has no effect on the includibility in her gross estate óf the interest which she transferred in 1932 with the retention of the right to income for life.
For the reasons stated I would reverse the judgment with directions to dismiss the case.

. Int.Rev.Code of 1939, § 811(c) (1) (B) (i).

. Blair v. Commissioner of Internal Revenue, 300 U.S. 5, 12, 57 S.Ct. 330, 81 L.Ed. 465.