Court Opinion

ID: 8910633
Source: CourtListenerOpinion
Date Created: 2022-11-27 02:50:22.70381+00
Date Added: 2024-06-11T17:08:30.021483
License: Public Domain

RONEY, Circuit Judge,
concurring in part and dissenting in part:
I concur in the result and that portion of the opinion which holds that the community interest of the donors in the income of the donated property was insufficient to amount to “the right to income from, the property” as provided in 26 U.S.C.A. § 2036(a)(1). Thus, I agree that no portion of the donated property should be included in the estates of the deceased taxpayers.
I respectfully dissent, however, from that portion of the opinion which holds that such interest was not “retained” “under” the transfers here made. If after the transfers the donors’ remaining interest in the gifted property had been such as to qualify as “the right to income” under § 2036(a)(1), the tax consequences should be the same whether that interest was retained by the express provisions of donative instruments, or arose by operation of law in effect at the time of the gift.
The cases relied upon by Judge Garza do not compel a contrary decision. They hold only that a retained interest taxable under § 2036 may be created by an express or an implied agreement between the donor and donee at the time of transfer. Rose v. United States, 511 F.2d 259 (5th Cir. 1975); First National Bank of Shreveport v. United States, 342 F.2d 415 (5th Cir. 1965); Guynn v. United States, 437 F.2d 1148 (4th Cir. 1971); Estate of Skinner v. United States, 316 F.2d 517 (3d Cir. 1963); Estate of McNichol v. Commissioner, 265 F.2d 667 (3d Cir.), cert. denied, 361 U.S. 829, 80 S.Ct. 78, 4 L.Ed.2d 71 (1959); Estate of Gilman, 65 T.C. 296 (1975). Those cases do not support the proposition that the creation of a § 2036 retained interest may not arise solely by operation of law, but requires an act or omission of the donor. While the opinion of the Tax Court in Estate of Gutchess, 46 T.C. 554 (1966), gives some support to the proposition, the statutory homestead residence rights involved in that case were not the kind of retained interest at which § 2036 was aimed. Had it been otherwise, it is doubtful the Tax Court would have used the language that it did.
In any event, a thorough discussion here is not called for because the point does not control the outcome of this case. The taxpayers’ community interest in the separate property of their wives not being “the right to income from the property” within the meaning of § 2036(a)(1), it makes no difference whether or not that community interest was “retained” “under” the transfers.