Court Opinion

ID: 4489267
Source: CourtListenerOpinion
Date Created: 2020-01-17 22:01:45.51245+00
Date Added: 2024-06-11T15:03:54.771610
License: Public Domain

StbRNHagen,
dissenting: This, in my opinion, is directly contrary to numerous other cases which have been decided by the courts and by the Board, and which are, in my opinion, correct. Ormsby McKnight Mitchel, 1 B. T. A. 148; Mitchel v. Bowers, 9 Fed. (2d) *727414 (D. C.); Mitchel v. Bowers, 15 Fed. (2d) 287; 273 U. S. 759; Bing v. Bowers, 22 Fed. (2d) 450; 26 Fed. (2d) 1017; American Telegraph & Cable Co., 2 B. T. A. 991; American Telegraph & Cable Co. v. United States, 61 Ct. Cls. 328; 271 U. S. 660; Louis Cohen, 5 B. T. A. 171; Samuel V. Woods, 5 B. T. A. 413; Hudson M. Knapp, 5 B. T. A. 762; Fred W. Warner, 5 B. T. A. 963; Alfred LeBlanc, 7 B. T. A. 256; Ella D. King, 10 B. T. A. 698; Arthur H. Van Brunt, 11 B. T. A. 406; George M. Cohan, 11 B. T. A. 743; M. C. Garber, 11 B. T. A. 979; Julius Rosenwald, 12 B. T. A. 350; Charles F. Colbert, Jr., 12 B. T. A. 565; T. B. Noble, 12 B. T. A. 1419; Florence V. Cruickshank, 13 B. T. A. 508; Maud Dunlap Shellabarger, 14 B. T. A. 695.
Under varying states of fact the principle has been consistently recognized that by an assignment of future income the assignor does not escape tax. To say that such an assignment is a transfer of an interest in the fund is to override the principle by casuistry. By its very terms the assignment gave to the wife only an interest in income and the corpus remained unaffected in petitioner; so that even if there is a distinction between a transfer of an interest in the corpus and a so-called transfer of the right to receive income, this is in the latter category. The assignee derives through the petitioner and the law treats the income as if it were received by him before it goes to her. This theory is no harder to grasp and involves no more fiction than many other concepts of the law, while to disregard it would distort the income tax by making it depend upon the disposition of income.
As to the Stanchfield payment, I am unable to find its place among the statutory deductions allowed in the determination of taxable net income.
MaRquette, Trammell, Akundell, Van Fossan, and Murdock agree with this dissent.