Court Opinion

ID: 4631742
Source: CourtListenerOpinion
Date Created: 2020-11-21 03:10:16.656129+00
Date Added: 2024-06-11T07:57:46.681592
License: Public Domain

WALDEMAR R. HELMHOLZ, EXECUTOR OF THE ESTATE OF IRENE C. HELMHOLZ, DECEASED, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.Helmholz v. CommissionerDocket No. 50485.United States Board of Tax Appeals28 B.T.A. 165; 1933 BTA LEXIS 1174; May 23, 1933, Promulgated 1933 BTA LEXIS 1174">*1174  The decedent, the grantee of a special power of appointment of an interest less than a fee, by will appointed her husband to receive the income from certain trust property during his life.  The corpus of the trust had been irrevocably transferred and the trust agreement provided for the disposition of the remainder upon the termination of the trust.  Held, no part of the trust property is to be included in the decedent's gross estate.  James Quarles, Esq., for the petitioner.  Lewis S. Pendleton, Esq., for the respondent.  SMITH 28 B.T.A. 165">*165  The Commissioner determined a deficiency of $13,267.34 in estate tax, which is subject to the credit for the state inheritance tax paid.  The issues for our determination are (1) whether the corpus of a certain trust, or any interest therein, is to be included in the decedent's gross estate; and (2) the fair market value of certain stock.  FINDINGS OF FACT.  The petitioner was the duly appointed administrator of the estate of Irene C. Helmholz, and is the sole beneficiary under the will of the decedent, who died on October 19, 1927, a resident of the State of wisconsin.  On June 7, 1918, the decedent, her1933 BTA LEXIS 1174">*1175  parents, brothers and sisters, executed a trust agreement, which, in so far as material to our determination, is as follows: WHEREAS, all of the above named subscribers are members of the immediate family of said PATRICK CUDAHY and in the aggregate are the owners of all of the capital stock of said THE PATRICK CUDAHY FAMILY COMPANY except [exception not material]; and, WHEREAS, it is the earnest wish and desire of said subscribers to confine membership in said THE PATRICK CUDAHY FAMILY COMPANY so far as practicable to those of the immediate family of said PATRICK CUDAHY, their descendents and appointees, NOW, THEREFORE, in consideration of the premises and the several benefits accruing to each of the parties hereto and for other valuable considerations received by each of the parties hereto, the receipt whereof is hereby acknowledged, the subscribers hereto have sold, assigned, and transferred, and by these presents do sell, assign, and transfer to WISCONSIN TRUST COMPANY as trustee, and to its successors in trust the shares of stock of said THE PATRICK CUDAHY FAMILY COMPANY set opposite their respective names, each of said subscribers assigning and transferring the number1933 BTA LEXIS 1174">*1176  of shares set opposite his or her name respectively, and each acting on his or her own account and not one for the other, to-wit: * * * 28 B.T.A. 165">*166  IRENE C. HELMHOLZ, nine hundred ninety-nine shares * * * TO HAVE AND TO HOLD, the said shares of stock, IN TRUST, NEVERTHELESS, for the uses and purposes and upon the terms and conditions hereinafter expressed, and none other, that is to say: * * * SECOND: To receive all dividends, ordinary or extraordinary, or in liquidation, declared and paid on account of the said stock, and to distribute the same when and as received as hereinafter provided.  * * * * * * FOURTH: To pay and distribute the net amount of such dividends remaining after the payment of expenses of administration as aforesaid from time to time as follows, to-wit: (A) To each subscriber as long as he or she shall live the net dividends received in respect of the shares of stock by him or her respectively transferred and assigned as aforesaid.  (B) Upon the death of any subscriber, to pay to such then living appointee or appointees as such deceased subscriber in and by last will and testament admitted to probate shall designate and appoint, the net dividends1933 BTA LEXIS 1174">*1177  received in respect of the shares of stock by such subscriber transferred and assigned as aforesaid or such portion or portions thereof as such appointment shall direct.  No appointment hereunder shall be effective for a longer period than the natural life of the appointee.  In the event of the termination of the primary trust hereby created, no capital stock of THE PATRICK CUDAHY FAMILY COMPANY or other capital assets shall be distributed to any such testamentary appointee * * *.  (C) If any subscriber shall die without making appointment as aforesaid, or if any appointee of such subscriber shall not be entitled to take or upon the termination of the term of any appointment, then said trustee shall from time to time pay the net dividends received in respect of the shares of stock by such subscriber transferred and assigned as aforesaid, or such portion thereof as shall be affected by such failure to appoint or inability of the appointee to take, or termination of the term of appointment, to the issue of such subscriber living at the time of distribution proportionately by right of representation.  (D) In case a subscriber shall die without surviving issue, or the issue of a1933 BTA LEXIS 1174">*1178  deceased subscriber shall become extinct after the death of such subscriber, and either (1) such subscriber shall not have made appointment as aforesaid, or (2) the appointee shall not be entitled to take, or (3) the term of appointment shall have expired, then and in either of such events the said trustee thereafter shall pay the net dividends in respect of the stock transferred by such deceased subscriber or that portion thereof affected by either or any of the foregoing contingencies to the surviving subscribers or their issue living at the time of distribution proportionately by right of representation.  FIFTH: The term of the primary trust hereby created shall end * * * (2) upon delivery to the said trustee of a written instrument signed by all of the then beneficiaries, other than testamentary appointees, declaring said trust term at an end, * * * whereupon * * * the said trustee shall distribute the capital stock of said THE PATRICK CUDAHY FAMILY COMPANY to the beneficiaries then entitled to receive the net dividends thereon other than testamentary appointees; excepting the shares to the dividends upon which such testamentary appointees are entitled, which shall be held by1933 BTA LEXIS 1174">*1179  said trustee as hereinbefore provided.  28 B.T.A. 165">*167  By a supplemental agreement dated June 11, 1918 (said agreement being executed before the acceptance of the trust by the trustee, and considered by the parties as completing the trust agreement and not an alteration thereof), the power of appointment was restricted to natural persons and charitable organizations.  The decedent left the following will: I, Irene C. Helmholz, being of sound mind this 22nd day of Jan. 1921 - declare this to be my last will and Testament - do hereby bequive to my Husband, all my possessions - IRENE C. HELMHOLZ Witnesses JOHN BANNEN J. W. BRYDEN The above will was duly admitted to probate and the decedent's estate administered thereunder.  At the date of the death of the decedent, the articles of incorporation and the by-laws of the Patrick Cudahy Family Co., in so far as material hereto, were as follows: Section 1.  No transfer of stock in this corporation shall be valid except in pursuance of the vote of a majority of all the outstanding shares and before offering the said stock in writing to the Board of Directors of this corporation at its par value and giving said Board of Directors1933 BTA LEXIS 1174">*1180  ninety (90) days in which to sell said stock at such par value to the then stockholders of the corporation.  At the expiration of ninety (90) days if no stockholders have purchased and paid for said stock, such stockholder or stockholders offering to sell shall have the right to sell to any one whomsoever.  Section 2.  All of the shares of this corporation heertofore issued shall be recalled and shall be reissued to the stockholders and such reissued shares shall have imprinted thereon in words or substance Section 1 of this Article, and such shares as may hereafter be issued shall likewise have so imprinted thereon such section.  The petitioner sought to have one share of the capital stock of the Patrick Cudahy Family Co. transferred upon the books of that company and on December 4, 1928, the board of directors of the company adopted a resolution with respect to this share of stock which, in so far as material hereto, is as follows: WHEREAS, W. R. Helmholz, as Executor of the Estate of Irene C. Helmholz, deceased, has tendered Certificate No. 9 for one (1) share of the capital stock of said corporation, issued and now outstanding in the name of Irene C. Helmholz, and has demanded1933 BTA LEXIS 1174">*1181  that the same be transferred to W. R. Helmholz; and WHEREAS, the stockholders of this corporation desire that none of said shares of stock shall pass out of the hands of the descendents of Patrick Cudahy, the founder of this company; NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Patrick Cudahy Family Company that pursuant to the articles of incorporation and by-laws aforesaid, this corporation buy the said share of stock so tendered for the use and benefit of all the remaining stockholders of the corporation 28 B.T.A. 165">*168  proportionately, and sell the same to said stockholders at the par value thereof, in such proportionate, fractional interests as shall divide the same equally among the stockholders joining in such purchase.  RESOLVED, FURTHER, that the treasurer of the corporation pay to W. R. Helmholz the sum of One Hundred Dollars ($100.00) for the par value of said share of stock, and that the secretary of the corporation transfer the same upon the books of the company to the stockholders purchasing the same, and issue fractional shares therefor to the stockholders entitled to the same.  The petitioner, as administrator of the estate of Irene C. Helmholz, 1933 BTA LEXIS 1174">*1182  filed a Federal estate tax return and listed thereon as property belonging to the decedent at the time of her death one share of the Patrick Cudahy Family Co. stock valued at $240.  In determining the deficiency, the respondent included this share of stock in the gross estate at a valuation of $320.  In determining the deficiency the respondent also included as a part of the decedent's gross estate 999 shares of the Patrick Cudahy Family Co., valued at $320 per share, which had been transferred by this decedent to the Wisconsin Trust Co. on June 7, 1918.  In the statement attached to the deficiency notice is the following explanation.  Upon examination of this provision of the by-laws of the company, it is evident that this provision is binding upon all stockholders during their lifetime, but there is nothing in the by-laws which makes it mandatory that an executor of a deceased stockholder must offer the stock for sale at $100.00 a share to the remaining stockholders.  Following the decision in the case of Louise N. Schulz v. Commissioner of Internal Revenue, reported in 1933 BTA LEXIS 1174">*1183 14 B.T.A. 419">14 B.T.A. 419, and affirmed on appeal by the Circuit Court of Appeals for the First Circuit in a decision rendered March 29, 1930, (Commerce Clearing House Service, Volume 5, Page 15770) it is the opinion of the Bureau that this provision of the by-laws of the Patrick Cudahy Family Company is not binding upon the executor.  The tentatively determined value of $320.00 a share will be adhered to and no adjustment will be made therein. * * * Under the terms of the trust agreement the decedent reserved to herself not only the income from that part of the stock which she placed in the trust but had likewise the power in conjunction with the other settlors to revoke the trust agreement.  The Bureau is, therefore, of the opinion that the full value of the property transferred is taxable under Sections 312(c) and (d) of the Revenue Act of 1926.  The appraisers appointed by the County Court of Milwaukee County to appraise the property in the decedent's estate, appraised one share of stock of the Patrick Cudahy Family Co. at the fair market value of $100, and determined the fair market value of the life estate of the decedent's appointee to be $65,829.11.  The average dividend1933 BTA LEXIS 1174">*1184  upon the stock of the Patrick Cudahy Family Co. from 1909 (when organized) to 1932, was $6.14 per share.  The fair market value of such stock at the date of the decedent's death was $100 per share.  28 B.T.A. 165">*169  OPINION.  SMITH: No jurisdictional question has been raised by either party to this proceeding, but because of the record made herein we deem it advisable to consider that question.  Cf. Martha M. Hanify,21 B.T.A. 379">21 B.T.A. 379. The deficiency notice was addressed to "Waldemar R. Helmholz, Executor, Estate of Irene C. Helmholz." The petition, captioned "WALDEMAR R. HELMHOLZ, as sole devisee and legatee under the will of IRENE C. HELMHOLZ, deceased," was based upon that notice.  In his petition the petitioner alleged, and the respondent admitted, that "the Petitioner was and is the sole beneficiary under the will of said Irene C. Helmholz, and it is in that capacity he prosecutes this appeal." It appears that the petitioner duly administered the estate, made final settlement of his accounts, and was discharged as administrator by the County Court of Milwaukee County in September 1928.  It does not appear that the petitioner ever notified the Commissioner of such final1933 BTA LEXIS 1174">*1185  settlement and discharge.  The settlement of the estate and the final discharge of the administrator before the tax obligations were discharged neither extinguished the tax nor relieved the petitioner from his liability under the law to pay it.  Petitioner has invoked the jurisdiction of this Board for a redetermination of the deficiency set forth in the notice addressed to him as executor of the decedent's estate.  No one has been misled as to the liability asserted.  In these circumstances we accept jurisdiction of the proceeding.  Charles Hallock Whitehead, Executor,24 B.T.A. 1111">24 B.T.A. 1111; Jessie Smith, Executrix,24 B.T.A. 807">24 B.T.A. 807; Commissioner v. New York Trust Co., 54 Fed.(2d) 463; certiorari denied, 285 U.S. 556">285 U.S. 556. The primary issue is whether the 999 shares of stock, or any interest therein, which the decedent placed in the trust created by the decedent, her parents, brothers and sisters in 1918, should be included in her gross estate.  The respondent contends "that the value of the property in question was properly included in the gross estate under the provisions of Section 302(c) and Section 302(d) of the Revenue Act1933 BTA LEXIS 1174">*1186  of 1926." The petitioner insists that not even the life interest of the decedent's appointee should be included in the gross estate.  In so far as material hereto, section 302 of the Revenue Act of 1926 is as follows: The value of the gross estate of the decedent shall be determined by including the value at the time of his death of all property, real or personal, tangible or intangible, wherever istuated - * * * (c) To the extent of any interest therein of which the decedent has at any time made a transfer, by trust or otherwise, in contemplation of or intended to take effect in possession or enjoyment at or after his death, except in case 28 B.T.A. 165">*170  of a bona fide sale for an adequate and full consideration in money or money's worth.  * * * (d) To the extent of any interest therein of which the decedent has at any time made a transfer, by trust or otherwise, where the enjoyment thereof was subject at the date of his death to any change through the exercise of a power, either by the decedent alone or in conjunction with any person, to alter, amend, or revoke, or where the decedent relinquished any such power in contemplation of his death, except in case of a bona fide sale1933 BTA LEXIS 1174">*1187  for an adequate and full consideration in money or money's worth.  * * * * * * (f) To the extent of any property passing under a general power of appointment exercised by the decedent (1) by will, or (2) by deed executed in contemplation of, or intended to take effect in possession or enjoyment at or after, his death, except in case of a bona fide sale for an adequate and full consideration in money or money's worth.  In construing the decedent's will as a valid exercise by Irene C. Helmholz of the power of appointment reserved in the trust agreement, the Supreme Court of Wisconsin, in First Wisconsin Trust Co. v. Helmholz,198 Wis. 573">198 Wis. 573; 225 N.W. 181">225 N.W. 181, 225 N.W. 181">183, said: * * * She had a most hazy conception of the change which the trust deed had wrought upon her rights in and title to the corporate stock conveyed by that deed.  In drafting her will she used the language of the Layman.  So far as the terms of her will were concerned, her husband was constituted her sole beneficiary.  We glean no purpose from the terms of the will to make any other person the beneficiary of her bounty.  She probably was not conscious of the necessity of exercising her1933 BTA LEXIS 1174">*1188  power of appointment by her last will and testament, and a specific intent to that end probably was not present in her mind, but it does most satisfactorily appear that she intended to make her husband the beneficiary of all and everything of value which she could confer upon him by her last will and testament.  If this purpose on her part is to be given effect, the will must be construed as an exercise of the power of appointment.  Not to do so would be recreant to the sacred trust with which the judiciary stands charged, inconsistent with established principles of law, and especially the uniform rulings of this court.  The Supreme Court of Wisconsin affirmed the trial court in holding that the decedent's husband was "beneficiary of the dividends accruing from or paid upon the 999 shares of stock conveyed by her trust deed." By the provisions of the trust deed, the remainders after the life estate of the grantors and their appointees were vested in the issue of such grantors, and, failing issue, in a designated charitable trust - such remainders taking effect upon the termination of the primary trust.  If it were not for the provision for the termination of the trust and the power1933 BTA LEXIS 1174">*1189  of appointment reserved by the decedent, we would have no hesitancy in holding that the corpus of this trust should not be included in the decedent's gross estate under the ruling in May v. Heiner,281 U.S. 238">281 U.S. 238, which was followed per curiam in Burnet v. Northern Trust Co.,283 U.S. 782">283 U.S. 782; Morsman v. Burnet,283 U.S. 783">283 U.S. 783; 28 B.T.A. 165">*171  and McCormick v. Burnet,283 U.S. 784">283 U.S. 784. See also Elizabeth B. Wallace, Executrix,27 B.T.A. 902">27 B.T.A. 902. In Charles H. W. Foster et al., Executors,26 B.T.A. 708">26 B.T.A. 708; affd., C.C.A., 1st Cir., March 20, 1933, we said: * * * Where, as here, gifts are made irrevocably to a trust and the donor reserves the income to himself for life and the right to designate the beneficiaries of the income after his death, which right is exercised in accord with the trust agreement, it is doubtful whether any portion of the trust property should be included in the decedent's gross estate in view of the decision in 1933 BTA LEXIS 1174">*1190 281 U.S. 238">May v. Heiner, supra. Such doubts should be resolved in favor of the taxpayer (Gould v. Gould,245 U.S. 151">245 U.S. 151, 245 U.S. 151">153), particularly in view of the fact that immediately following the per curiam decisions in 283 U.S. 782">Burnet v. Northern Trust Co., supra;283 U.S. 783">Morsman v. Burnet, supra;283 U.S. 784">McCormick v. Burnet, supra,Congress amended section 302(c) of the Revenue Act of 1926 by joint resolution (Public 131), approved March 4, 1931, which specifically provides for the inclusion of property transferred in trust where the transferor "has retained for his life * * * the income from the property or * * * the right to designate the persons who shall * * * enjoy * * * the income therefrom." The amendment was not retroactive and has been applied only to transfers "made after 10:30 P.M. * * * March 3, 1931." Treasury Decision 4314.  See United States v. Field,255 U.S. 257">255 U.S. 257. The provision for the termination of the trust, "upon delivery to the * * * trustee of a written instrument signed by all of the then beneficiaries, other than testamentary appointees, declaring said trust term at an1933 BTA LEXIS 1174">*1191  end," did not render the trust revocable.  The grantors of the trust are generally referred to as the subscribers, but assuming that the term "beneficiaries" embraces the grantors, no one of them could have revoked the trust alone.  As was said by the Circuit Court of Appeals for the First Circuit in White v. Erskine, 47 Fed.(2d) 1014, 1016: * * * but where the decedent has no such power except by the consent of an adverse party as one of the beneficiaries, or as in this instance of the trustee for the beneficiaries, the right of revocation is gone from the donor and also all beneficial interest for taxing purposes under section 301 of the act.  See also Reinecke v. Northern Trust Co.,278 U.S. 339">278 U.S. 339, 278 U.S. 339">346; Union Guardian Trust Co.,26 B.T.A. 1321">26 B.T.A. 1321, 26 B.T.A. 1321">1324. In Porter v. Commissioner,288 U.S. 436">288 U.S. 436, the Supreme Court pointed out that: * * * Congress has progressively expanded the bases for such taxation.  Comparison of § 302 with corresponding provisions of earlier Acts warrants the conclusion that (d) is not a mere specification of something covered by (a) but that it covers something not included therein. 1933 BTA LEXIS 1174">*1192  Cf. Chase National Bank v. United States,278 U.S. 327">278 U.S. 327. Tyler v. United States,281 U.S. 497">281 U.S. 497. Gwinn v. Commissioner, 287 U.S.  .  Burnet v. Guggenheim, 287 U.S.  .  * * * Subdivision (d) requires to be included in the calculation all property previously transferred by decedent, the enjoyment of which remains at the time of his death subject to any change by the exertion of a power by himself alone or in conjunction with another.  * * * Here the donor retained 28 B.T.A. 165">*172  until his death power enough to enable him to make a complete revision of all that he had done in respect of the creation of the trusts even to the extent of taking the property from the trustees and beneficiaries named and transferring it absolutely or in trust for the benefit of others.  So far as concerns the tax here involved, there is no difference in principle between a transfer subject to such changes and one that is revocable.  The transfers under consideration are undoubtedly covered by subdivision (d).  * * * the reservation here * * * while subject to the specified limitation [that there could be no change in favor of the grantor or his estate], 1933 BTA LEXIS 1174">*1193  * * * made the settlor dominant in respect of other dispositions of both corpus and income.  His death terminated that control, ended the possibility of any change by him, and was, in respect of title to the property in question, the source of valuable assurance passing from the dead to the living.  * * * In the instant proceeding, Mrs. Helmholz had irrevocably disposed of the corpus of the trust, and that property went to the remaindermen designated in the trust agreement, upon the termination of the trust.  She had no power to alter, amend, or revoke the trust instrument that would effect such a disposition as was possible in the Porter case and bring the property within the purview of subdivision (d).  In White v. Erskine, supra, the Circuit Court of Appeals for the First Circuit, in construing subdivision (d) of the statute, said: To hold that Congress under subdivision (d) intended under the guise of a tax on the transfer of property at death to impose a tax solely on a limited power of alteration of a trust, or a limited power of appointment under it, would be contrary, not only to the spirit of the act, but the express terms of section 301, 1933 BTA LEXIS 1174">*1194 Leser, Executrix, v. Burnet, Com., supra; Fidelity-Phila. Trust Co., v. McCaughn (C.C.A.) 34 F.(2d) 600, 604, and so doubtful a construction that the contrary intent should be resolved in favor of the taxpayer, Gould v. Gould,245 U.S. 151">245 U.S. 151, 38 S. Ct. 53, 62 L. Ed. 211. Having found that the corpus of the trust here involved was not within the purview of subdivisions (c) and (d) of the statute, and by applying the cognate reasoning of the Porter case, it is reasonable to conclude that subdivision (f) covers property not otherwise specified in section 302.  See also United States v. Field,255 U.S. 257">255 U.S. 257. That being the case, is the property here involved to be included in the decedent's gross estate by reason of her power of appointment?  We have had occasion to determine what "property passing under a general power of appointment exercised by the decedent * * * by will" was to be included in the gross estate of such decedent.  Where the appointment has been general and unrestricted and upon the exercise thereof effectively disposed of the corpus, we have held that the appointed property was includable in the1933 BTA LEXIS 1174">*1195  gross estate.  See Emily Annette Agnus Leser, Executrix,17 B.T.A. 266">17 B.T.A. 266; Edward J. Hancy, Executor,17 B.T.A. 464">17 B.T.A. 464; Mary M. Lee, Executrix,18 B.T.A. 251">18 B.T.A. 251; affd., 57 Fed.(2d) 399; Cortlandt F. Bishop, Executor,23 B.T.A. 920">23 B.T.A. 920; Joseph Walker Wear et al., Executors,26 B.T.A. 682">26 B.T.A. 682. See also Stratton v. United States, 50 Fed.(2d) 48. 28 B.T.A. 165">*173  In John S. Montgomery et al., Executors,17 B.T.A. 491">17 B.T.A. 491, we held that the respondent correctly included the present worth of certain equitable life estates in the decedent's gross estate under section 402(e) of the Revenue Act of 1921, which is similar to the applicable provision of the 1926 Act here involved.  In that case it appeared that in 1898 Samuel M. Child created a trust for the benefit of designated beneficiaries, including the decedent (Harriette Hall Morris).  The trust continued until the death of the last surviving beneficiary.  Upon the death of each beneficiary he or she had a general power of appointment over his or her interest in the trust, that is, to dispose of the income during the continuance1933 BTA LEXIS 1174">*1196  of the trust and to dispose of the corpus upon the termination of the trust.  The decedent exercised her power of appointment, but with void limitations over.  In holding that the present worth of the life estates appointed by the decedent's will should be included in her gross estate, we ignored the remainders, which nevertheless passed to her descendents just as if she had failed to exercise her power of appointment.  These facts distinguish the Montgomery case from the instant proceeding.  In Leser v. Burnet, 46 Fed.(2d) 756, the Circuit Court of Appeals for the Fourth Circuit in part reversed the Board's decision (17 B.T.A. 266">Emily Annette Agnus Leser, Executrix, supra) and held that only property subject to a general power of appointment was to be included in the gross estate of the donee of such power.  The court said: * * * The first question to be determined, therefore, is what is meant by a general power within the meaning of the act, and we think there can be no question that by a general power is meant one which may be exercised by the donee of the power in favor of any person whomsoever including the donee himself or his own creditors. 1933 BTA LEXIS 1174">*1197  * * * In this respect, the case of a general power of appointment is analogous to that of a policy of insurance where the insured has the right to change the beneficiary and thus secure for his estate or his creditors the proceeds of the policy.  In such case it is held that the proceeds of the policy may properly be included in the estate of the insured for the purpose of the estate tax.  See Chase Nat. Bank v. U.S.,278 U.S. 327">278 U.S. 327, 278 U.S. 327">335, 49 S. Ct. 126, 127, 73 L. Ed. 405, 63 A.L.R. 388">63 A.L.R. 388, * * * * * * The inclusion for purposes of estate taxation of property transferred under a general power is analogous also to the inclusion of property transferred in trust with power of revocation reserved to the grantor.  It is held that upon the grantor's death such property should be included in valuing his gross estate, upon the principle that the passing from him of the power and control over the property is taxable as a transfer.  Reinecke v. Trust Co.,278 U.S. 339">278 U.S. 339, 278 U.S. 339">345, 49 S. Ct. 123, 73 L. Ed. 410, 66 A.L.R. 397">66 A.L.R. 397; 1933 BTA LEXIS 1174">*1198 Saltonstall v. Saltonstall,276 U.S. 260">276 U.S. 260, 276 U.S. 260">271, 48 S. Ct. 225, 72 L. Ed. 565. Except that the donee of a general power may exercise it in favor of his creditors and thus use the property which is the subject of the power for his 28 B.T.A. 165">*174  own use and benefit, there is no basis for including in his taxable estate property which is subject thereto; for this right is all that passes from his estate by reason of his death.  In Y.M.C.A. v. Davis,264 U.S. 47">264 U.S. 47, 44 S. Ct. 291, 292, 68 L. Ed. 558, the Supreme Court said: "What this law taxes is not the interest to which the legatees and devisees succeeded on death, but the interest which ceased by reason of death." By this language we understand the court to mean that the tax is imposed on what is transferred from decedent as a result of his death (New York Trust Co. v. Eisner,256 U.S. 345">256 U.S. 345, 41 S. Ct. 506, 65 L. Ed. 963, 16 A.L.R. 660">16 A.L.R. 660; Knowlton v. Moore,178 U.S. 41">178 U.S. 41, 20 S. Ct. 747, 44 L. Ed. 969); and it logically follows that, where nothing is transferred, as where property passes under a limitation in remainder, there is no transfer to tax.  1933 BTA LEXIS 1174">*1199 278 U.S. 339">Reinecke v. Trust Co., supra. Nothing passes or is transferred from the estate of the donee in the case of a naked or special power of appointment, and Congress has recognized this fact by not requiring that property passing under a special power be included in the estate.  It is only property subject to a general power - property of which the donee might have obtained the benefit by subjecting it to the payment of his debts - which is required to be included.  The court then proceeded to determine "whether the power created by the conveyance * * * is a general power" under the laws of Maryland, saying: * * * Only by considering, not merely the language creating a power, but the effect and meaning which is given that language by the law of the state which governs the exercise of the power, can uniformity in the operation of the statute be attained.  Under the terms of the trust indenture involved in the instant proceeding, the only power of appointment reserved to the decedent was the power to appoint the beneficiary of her share of the income, and merely for the life of her appointee.  Her power of appointment did not cover the corpus of the trust, which1933 BTA LEXIS 1174">*1200  had irrevocably passed beyond her control and which went to her issue upon the termination of the trust.  Her power to appoint a life beneficiary was restricted to a natural person and/or a charitable organization which, if appointed, could only receive the income during the remainder of the term of the trust.  General and special powers are defined in the Wisconsin Statutes (1927) as follows: SEC. 232.05.  General Power. A power is general when it authorizes the alienation in fee, by means of a conveyance, will, or charge of the lands embraced in the power, to any alienee whatever.  SEC. 232.06.  Special Power. A power is special: (1) When the person or class of persons to whom the disposition of the lands under the power to be made are designated.  (2) When the power authorizes the alienation by means of a conveyance, will, or charge of a particular estate or interest less than a fee.  Special powers in trust are defined in section 232.22 as follows: A special power is in trust: (1) When the disposition which it authorizes is limited to be made to any particular persons other than the grantee of such power.  28 B.T.A. 165">*175  (2) When any person or class of persons, 1933 BTA LEXIS 1174">*1201  other than the grantee, is entitled to any benefit from the disposition or charge authorized by the power.  The term grantee as so used includes the person in whom the power of appointment is vested by reservation, as in the instant proceeding.  See section 232.58.  While these definitions are a part of the real property law of Wisconsin, they are applied as the personal property law.  Cawker v. Dreutzer (Wis.), 221 N.W. 401">221 N.W. 401, 221 N.W. 401">413. The power of appointment reserved to the decedent embraced an interest less than a fee, the disposition within the exercise of the power was limited to persons other than the grantee, and the benefit thereunder was restricted to the life of a natural person or a charitable organization for the remainder of the term.  The power of appointment reserved to the decedent was therefore a special power (Cf. 221 N.W. 401">Cawker v. Dreutzer, supra ), and since the revenue act covers only property passing under a general power, the interest conveyed by the decedent's exercise of this special power of appointment, to wit, the life estate of this petitioner, should not be included in the gross estate. 1933 BTA LEXIS 1174">*1202 Leser v. Burnet, supra.The secondary question is the fair market value of the one share of stock which the respondent has included in the gross estate at a value of $320, and which the petitioner contends had a fair market value of only $100.  There were no sales of this stock, and when the petitioner sought to have it transferred to himself he was offered $100 for it.  The restrictions upon the disposition of this stock were valid and enforceable under the law of Wisconsin.  See In re Laun,146 Wis. 252">146 Wis. 252; 131 N.W. 366">131 N.W. 366; Casper v. Kalt-Zimmers Mfg. Co.,159 Wis. 517">159 Wis. 517; 149 N.W. 754">149 N.W. 754. Unlike the situation considered in Estate of Louise N. Schulz,14 B.T.A. 419">14 B.T.A. 419, the directors of the Patrick Cudahy Family Co. tendered $100 to the petitioner in an effort to purchase this share; it does not appear whether or not the tender was accepted.  The appraisers for the State of Wisconsin considered the restrictions upon the transfer of this stock in determining a valuation of $100.  When these restrictions are considered in the light of the dividend record of the corporation, and the fact that it was1933 BTA LEXIS 1174">*1203  a close family affair, we are unable to conceive of a concourse of buyers and sellers that would give this stock the fair market value determined by the respondent.  In these circumstances we sustain the petitioner's valuation of $100 for this share.  Cf. Herbert W. Eldredge,18 B.T.A. 194">18 B.T.A. 194; Richard deZ. Pierce et al., Administrators,22 B.T.A. 1070">22 B.T.A. 1070. Reviewed by the Board.  Judgment will be entered under Rule 50.STERNHAGEN dissents.