Court Opinion

ID: 4622697
Source: CourtListenerOpinion
Date Created: 2020-11-21 02:50:00.463909+00
Date Added: 2024-06-11T07:56:13.667291
License: Public Domain

HAROLD T. AND ALEXANDER WHITE, EXECUTORS, ESTATE OF WILLIAM AUGUSTUS WHITE, PETITIONERS, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.White v. CommissionerDocket No. 16053.United States Board of Tax Appeals15 B.T.A. 1417; 1929 BTA LEXIS 2674; April 12, 1929, Promulgated *2674  Gifts inter vivos made by the decedent prior to the passage of the Revenue Act of 1924, to wit, June 2, 1924, are not taxable under sections 319-324 of that Act as amended by the Revenue Act of 1926.  Charles C. Parlin, Esq., for the petitioners.  Eugene Meacham, Esq., for the respondent.  MORRIS *1417  This proceeding is for the redetermination of a deficiency in tax of $30,152.67 upon gifts made during the calendar year 1924, and the sole question for determination is the amount of said gifts properly taxable under sections 319-324 of the Revenue Act of 1924, as amended by the Revenue Act of 1926.  FINDINGS OF FACT.  The decedent, prior to his death on May 6, 1927, filed a Federal gift-tax return of gifts made by him during the calendar year 1924, in which he reported the following: Cash giftsDateValueMrs. William EmersonJan. 4$20,000.00 Do100.00Alexander M. WhiteJan. 420,000.00 Do100.00Harold T. WhiteJan. 420,000.00Francis M. WeldJan. 410,000.00 Do225.00Alexander F. Moffat100.00Donald Moffat100.00George B. Moffat100.00Frances M. Frazier100.00Elinor White$100.00Margaret L. Weld1,157.00Alfred White Weld112.50David Weld225.00Mrs. Margaret White Weld5,000.00Rev. Charles H. Lyttle1,000.00Mrs. Genevieve L. Frothingham1,000.00Miss Hilda Loines600.00Miss Elma Loines600.00Miss Sylvia Loines600.00*2675 *1418  In addition to the foregoing cash gifts he also reported gifts to 14 grandchildren on March 5, 1924, of 200 shares of Washington Water Power Co., 100 shares American Telephone & Telegraph Co., and 75 shares General Electric Co., valued for tax purposes at $696,325.  The gifts recorded as having been made on January 4 and March 5, 1924, were actually consummated on those dates.  The following gifts, hereinabove listed without dates, were made subsequently to June 2, 1924: Donald Moffat $100George B. Moffat100Frances M. Frazier100Alexander M. White, jr100Elinor White100Margaret White Weld5,000Mrs. Genevieve L. Frothingham1,000Rev. Charles H. Lyttle1,000Margaret L. Weld (portion of $1,157 gift hereinbefore listed)357Hilda Loines (portion of $600 gift hereinbefore listed)100Elma Loines (portion of $600 gift hereinbefore listed)100Sylvia Loines (portion of $600 gift hereinbefore listed)100The remaining $800 of the $1,157 gift made to Margaret L. Weld was recorded in the decedent's check book as having been made on April 8, 1924, and the remaining $500 of each of the $600 gifts to Hilda, Elma and Sylvia Loines*2676  were made on May 26, 1924.  The gifts of $112.50, $225, and $225 to Alfred White Weld, Francis M. Weld, and David Weld, respectively, were recorded as having been made on or about April 15, 1924.  Margaret L. Weld was the only one of the recipients to receive in excess of $50,000 during the entire calendar year 1924, she receiving $50,894.50, $49,737.50 of which amount was received prior to June 2, 1924.  OPINION.  MORRIS: The taxability of gifts fully consummated by a decedent prior to June 2, 1924, is controlled by Blodgett v. Holden,275 U.S. 142">275 U.S. 142, and Untermyer v. Anderson,276 U.S. 440">276 U.S. 440, in which it was held that insofar as the gift-tax provisions of the Revenue Act of 1924 *1419  were applicable to bona fide gifts not made in anticipation of death and fully consummated prior to June 2, 1924, said provisions were arbitrary and invalid under the due process clause of the Fifth Amendment to the Constitution.  The record does not show when the two gifts of $100 each were made to Mrs William Emerson and Alexander F. Moffat.  However, since the specific exemption of $50,000 clearly exceeded the amount of all gifts made subsequently*2677  to June 2, 1924, no tax was due under the return as filed, and, therefore, the proposed deficiency based upon said return must be disapproved.  Judgment will be entered for the petitioners.