Court Opinion

ID: 9443137
Source: CourtListenerOpinion
Date Created: 2023-08-03 19:11:58.825423+00
Date Added: 2024-06-11T17:29:23.096564
License: Public Domain

PICKETT, Circuit Judge
(dissenting).
The conclusions reached by Judge Huxman in his opinion appear logical and the result reached will ordinarily bring about a satisfactory and uniform result in the taxation of the income to estates where losses are actually incurred in the handling of the affairs of an estate. Considering the facts presented in the case before us now, it seems to me, however, that the question is closed by Anderson v. Wilson, 289 U.S. 20, S3 S.Ct. 417, 77 L.Ed 1004. There the last will and testament of the testator left certain of his property to- the executors to be disposed of by them at such time as they should determine was advantageous and to distribute the proceeds to certain devisees. Among the assets received by the executors was some real estate which was sold by them at a loss. The question presented was whether the loss should be taken by the executors or by the devisee taxpayer. Mr. Justice Cardozo stated the issues to be: “The government contends, and so the courts below have held, that title to the realty was given to the executors upon a valid trust to sell and to apply the rents and profits in the interval. The representatives of the taxpayer contend that the executors had no title, but only a power in trust, and that subject to the execution of that power, the taxpayer was owner. If that be so, the loss was his and no one else’s.” The court held that under New York law, title to the property was in the executors and that the taxpayer under the terms of the will was not entitled to receive the property but only an interest in the fund created by the sale. Consequently the taxpayer, not being the owner of the property, suffered no loss.
It is conceded that under the Texas law, title to the bonds in question here was in the beneficiaries named in the will upon the death of the testator subject to administration. Under Texas law and the terms of the will, the beneficiaries were entitled to receive the bonds in kind and not the proceeds from their sale. The taxpayer did receive his share in kind. They were distributed to him with a depreciated value occuring while he was the owner. As I understand the Anderson decision, it was *819predicated solely upon the question of who owned the property and the ordinary or extraordinary duty of the executor under the terms of the will was not a factor.
For these reasons I would affirm the judgment.