Court Opinion

ID: 9638739
Source: CourtListenerOpinion
Date Created: 2023-08-22 15:52:28.908398+00
Date Added: 2024-06-11T18:10:09.248082
License: Public Domain

COLEMAN, District Judge
(dissenting).
I find myself unable to agree with the conclusion reached by the majority of the Court in these cases.
I believe the reasoning in Armstrong v. Commissioner of Internal Revenue, 143 F.2d 700, a recent decision of the Circuit Court of Appeals for the Tenth Circuit, is sound; and while the facts in that case and those 'in the present cases are different in some respects, I do not find sufficient difference to warrant a different conclusion. Certainly, the facts in the cases before us are more akin to those in the Armstrong case than to those in Losh v. Commissioner of Internal Revenue, 10 Cir., 145 F.2d 456, which the majority opinion admits is not as close “to the dividing line” as are the present cases. Grant v. Commissioner of Internal Revenue, 10 Cir., 150 F.2d 915, presents facts that are even less similar. In that case, there was merely a colorable husband and wife partnership — no deed of trust involved, no actual change in own-ship. Likewise, Doyle v. Commissioner of Internal Revenue, 4 Cir., 147 F.2d 769; Stockstrom v. Commissioner of Internal Revenue, 8 Cir., 148 F.2d 491 and Doll v. Commissioner of Internal Revenue, 8 Cir., 149 F.2d 239, present little analogy on their facts.
The opinion in Helvering v. Clifford, 309 U.S. 331, 60 S.Ct. 554, 84 L.Ed. 788, broad as is its language, should not, I feel, be construed as sweeping into its fold such a situation as that before us. That case involved an entirely different situation — ■ a short term trust with other quite different circumstances.
True, this Court is definitely restricted as respects the extent to which it may review the action of the Tax Court. But we have the right and are required to determine whether there is a rational basis for the legal conclusion reached by that Court and whether its decision is in accordance with applicable law. Dobson v. Commissioner, 320 U.S. 489, 64 S.Ct. 239, 88 L.Ed. 248. So, we must have something far more substantial to rely upon than — to use the language employed in the majority opinion — “straws to denote the direction of the tax wind,” and “inferences drawn by the Tax Court.”
To uphold the Tax Court in the present cases would be tantamount to saying that a parent cannot, without continuing to pay income taxes as though the property were still in fact his own, give property, *726by a deed of trust no matter how absolute, to a child so long as the parent himself is one of the trustees, if — even though in the exercise of honest, business judgment the trustees feel that they can thereby best preserve and increase the child’s trust estate— they invest the trust corpus in a business in which the father himself is interested and has invested his own money because he considers it a sound investment. I do not believe that Helvering v. Clifford, supra, or any decision yet rendered by the Supreme Court, requires us to go this far.