Court Opinion

ID: 8192437
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:15:32.515116+00
Date Added: 2024-06-11T16:40:39.236468
License: Public Domain

The following opinion was filed June 25, 1917:
WiNsnow, C. J.
(dissenting). The difficulty which the court has experienced with this case is quite apparent from *125the number of opinions filed. It is only just to say that every effort was made to harmonize the differences of opinion, but without success. 1 desire to state in the form of propositions my views without attempting to argue them out.
1. The interest of the annuitant in the present case was appraised and assessed pursuant to the provisions of the Inheritance Tax Law and the tax paid. State ex rel. Field v. Widule, 161 Wis. 393, 154 N. W. 696; Field v. Milwaukee, 161 Wis. 393, 154 N. W. 698. These cases, in my judgment, were correctly decided.
2. The inheritance tax having been paid by the annuitant, the yearly annuity payments are not subject to income taxation in her hands. This is not only the definite provision of the law, but it is res adjudicata with regard to the income in question. See cases cited upon the preceding proposition.
3. Income received by an executor or trustee for the benefit of a ward or other beneficiary is liable to income taxation subject to the deductions and exemptions provided in the Income Tax Law, provided they have not been claimed by the ward or beneficiary in another capacity.
4. This proviso is, in my judgment, singularly misunderstood by some of my brethren. To my mind it means simply that the beneficiary is to have the benefit of the statutory deductions and exemptions but once. If, for instance, the beneficiary has other income, e. g. a business income or. a salary, and has claimed the benefit of his exemptions and deductions out of that income, the executor or trustee is not allowed to claim them out of the annuity income, because they have been claimed by the beneficiary in another capacity, i. e. not as the beneficiary of a trust, but in his capacity as an individual carrying on business.
This, of course, applies to such deductions and exemptions as can be claimed in another capacity, as, for instance, the exemptions for husband and wife, minor children, and dependents, enumerated in sec. 1087m — 5, Stats., or the deductions for interest paid during the year on existing indebted*126ness or the like, enumerated in sec. 1087m — 4. These may he claimed in the individual capacity by the beneficiary as an individual simply and allowed out of other income than the annuity, and if so allowed are not to be again allowed out of the annuity.
The exemption of inheritance devises and bequests in trust cannot be claimed by the beneficiary in any capacity except in the capacity of beneficiary, hence the proviso cuts no figure in the ease.
I think the judgment should be affirmed.
A motion for a rehearing was denied without costs, except clerk’s fees, on October 23, 1917.