Court Opinion

ID: 4476189
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:11:53.627216+00
Date Added: 2024-06-11T14:53:53.954061
License: Public Domain

Opper, J., concurring: The question on the second issue is whether the income of the two Hargis estates for the first seven months or so of 1947 is taxable to the estates’ legatees. I concur in the present result because I think it required under the 1942 amendment to section 162 (b) whether or not the administration of the estates technically terminated in that year. As the Carlisle case 1 points out, the sentence added in 1942 to section 162 (b) reads as follows: “* * * As used in this subsection, ‘income which is to be distributed currently’ includes income for the taxable year of the estate or trust which, within the taxable year, becomes payable to the legatee, heir, or beneficiary.” (Emphasis added.) The effect of this definition under the remaining provisions of section 162 (b) was to render such income available as a deduction to the estate but to require that it be “included in computing the net income of the legatees * * * whether distributed to them or not.” 2  The report of the Senate Finance Committee (Rept. No. 1631, 77th Cong., 2d Sess.), phrases the purpose of the amendment as follows: “* * * to include in the income of a legatee or beneficiary the income of the estate or trust for its taxable year which, within such taxable year, becomes payable to the legatee or beneficiary even though it then becomes payable as part of an accu/rrmlation of income held until the happening of some event which occurs within the taxable year" (Emphasis added.) It is true that in Hazel Kirk Carlisle, supra, the “event” which occurred “within the taxable year” was the formal termination of administration of the estate. That is, to be sure, thought of by the Senate Finance Committee as the case “usually” to be found, so described by it, in language quoted in the Carlisle case (p. 367), as “where accumulated income of an estate is paid to a residuary legatee upon termination of the estate * * *.” (Senate Finance Committee Report, op. cit.) But it seems evident that both language and purpose are applicable to other situations, of which this seems to me one. The present record shows that the Harris County (Texas) Court not later than August 8, 1947, “ordered a distribution of the assets.” Although the statement of facts does not so state explicitly, the stipulation shows that at about that time the estate funds, presumably including all net income for the current year, were transferred from an account entitled “F. E. Hargis, Administrator” to “F. E. Hargis, Special.” The legatees thereby became entitled to distribution of all snch estate funds, including current income. This seems to be precisely the case to which the statutory provision was directed. I accordingly think it unnecessary to deal with such difficult subjects as whether a primary administration can formally terminate while an ancillary proceeding is still pending, and whether such matters as computation and payment of estate taxes do not constitute a continuing administration. Kern, Murdock, Turner, Tietjens, Raum, and Withey, JJ., agree with this concurring opinion.   Hazel Kirk Carlisle, 8 T. C. 563, affd. (C. A. 6), 165 F. 2d 645.    SEC. 162. NET INCOME. Tie net Income of the estate or trust shall be computed In the same manner and on the same basis as in the case of an individual, except that — > »****•• (b) There shall be allowed as an additional deduction in computing the net income of the estate or trust the amount of the income of the estate or trust for its taxable year which is to be distributed currently by the fiduciary to the legatees, heirs, or beneficiaries, but the amount so allowed as a deduction shall be included in computing the net income of the legatees, heirs, or beneficiaries whether distributed to them or not. As used in this subsection, “income which is to be distributed currently” includes income for the taxable year of the estate or trust which, within the taxable year, becomes payable to the legatee, heir, or beneficiary. Any amount allowed as a deduction under this paragraph shall not be allowed as a deduction under subsection (c> of this section in the same or any succeeding taxable year;