Court Opinion

ID: 9419608
Source: CourtListenerOpinion
Date Created: 2023-08-02 22:50:26.015838+00
Date Added: 2024-06-11T17:22:19.355210
License: Public Domain

Mr. Justice Reed,
dissenting.
This case differs from Commissioner v. Wemyss, ante, p. 303. Whether the transferor of the sums paid for the release of dower and other marital rights, received ade*314quate and full consideration in money and money’s worth, is a question of fact. The agreement recites that the parties contemplate marriage and provides that the trust shall be set up only in the event of and following the marriage. Petitioner was obligated to create the trust upon consideration of the relinquishment of marital rights and did so, and hence this is not a case involving marriage alone as consideration. Through the tables of mortality, the value of a survivor’s right in a fixed sum receivable at the death of a second party may be adequately calculated. By adopting present value as the accepted future value, the uncertainty inherent in fluctuations of an estate’s value is theoretically eliminated. The trial court thus found the present value of the release of the taxpayer’s estate from the wife’s survivorship rights largely exceeded the amount paid by the taxpayer and that the transactions between the parties were made in good faith for business reasons and not an attempt to evade or avoid taxes. Thus the District Court findings bring this transaction within the express language of the applicable Treasury Regulation.1 Merrill v. Fahs, 51 F. Supp. 120. Its determination, we think, also makes it clear that the husband’s estate *315received practical advantages of value m excess of the cost paid. See Henderson v. Usher, 125 Fla. 709, 727, 170 So. 846.
The question of the taxability as gifts of transfers to spouses in consideration of the release of marital rights had been a matter of dispute in courts before the passage of the Revenue Act of 1932, § 503, 47 Stat. 169, 247.2 Congress in the 1932 act, § 804, declared that a transfer of marital rights should not be “consideration in ‘money or money's worth' ” under the estate tax provisions. Thus Congress put beyond any question the liability of transferors for estate taxes where marital rights were the consideration for the transfer. On the other hand, in the same 1932 Revenue Act the language of the gift tax section, § 503, did not have a provision forbidding the valuation of marital rights. Consequently, § 503 as interpreted by Regulations 79, Art. 8, permits the treatment of the relinquishment of such rights, not donative in intent or effect, as “money’s worth” consideration for property transferred. It seems to us clear that with the judicial history of the difficulties in estate and gift taxes as to the transfer of marital rights, when Congress expressly provided that relinquishment of dower, curtesy or other statutory estate was not “consideration” for estate tax purposes and left the gift tax provision without such a limitation, it intended that these rights be accorded a different treatment under these sections. This has been the determination of the Tax Court.3
In our view this judgment should be reversed.
The Chief Justice and Mr. Justice Douglas join in this dissent.

 Treasury Regulations 79 (1936 ed.):
“Art. 8. Transfers for a consideration in money or money’s worth.— Transfers reached by the statute are not confined to those only which, being without a valuable consideration, accord with the common law concept of gifts, but embrace as well sales, exchanges, and other dis-positipns of property for a consideration in money or money’s worth to the extent that the value of the property transferred by the donor exceeds the value of the consideration given therefor. However, a sale, exchange, or other transfer of property made in the ordinary course of business (a transaction which is bona fide, at arm’s length, and free from any donative intent), will be considered as made for an adequate and full consideration in money or money’s worth. A consideration not reducible to a money value, as love and affection,promise of marriage, etc., is to be wholly .disregarded, and the entire yalue of the property transferred'constitutes the amount of the gift.”

 Ferguson v. Dickson, 300 F. 961; McCaughn v. Carver, 19 F. 2d 126; Stubblefield v. United States, 79 Ct. Cls. 268, 6 F. Supp. 440.

 Bristol v. Commissioner, 42 B. T. A. 263; Jones v. Commissioner, 1 T. C. 1207; Wemyss v. Commissioner, 2 T. C. 876, 881.