Court Opinion

ID: 4615623
Source: CourtListenerOpinion
Date Created: 2020-11-21 02:32:44.560837+00
Date Added: 2024-06-11T08:29:45.043368
License: Public Domain

DWIGHT WHITING AND GEORGE N. WHITING, TRUSTEES AND BENEFICIARIES FOR AND OF EMILY S. PERKINS, DECEASED, PETITIONERS, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.Whiting v. CommissionerDocket No. 78532.United States Board of Tax Appeals35 B.T.A. 100; 1936 BTA LEXIS 562; November 25, 1936, Promulgated *562  Decedent, on March 19, 1917, immediately preceding resumption of marital relationship with her estranged husband, with whom she had had difficulties concerning the management of her property, executed an instrument whereby she transferred certain shares of corporate stock to petitioners, who agreed to pay her a life annuity of $18,000 annually.  Subsequent developments made a change in the arrangement desirable.  On September 12, 1917, the agreement of March 19 was canceled an revoked and decedent by an irrevocable trust agreement transferred the stock to petitioners, reserving to herself the income therefrom for life, the remainder to petitioners if they survived her or to their heirs or to their appointees by will if they predeceased her.  The last agreement continued in effect until decedent's death on November 8, 1933.  Held, that the transfer made under the agreement of September 12, 1917, was not made in contemplation of death and was not to take effect in possession or enjoyment at or after decedent's death, and that no value on account thereof is to be included in decedent's gross estate, under section 302(c) of the Revenue Act of 1926 as amended by Joint Resolution of*563  March 3, 1931, and section 803(a) of the Revenue Act of 1932.  L. Dana Latham, Esq., for the petitioners.  Nathan Gammon, Esq., for the respondent.  TURNER *100  This proceeding is for the redetermination of a deficiency in estate tax in the amount of $213,636.02.  The principal issue presented is whether 49,995 shares of corporate stock transferred by the decedent to her two sons in 1917 constituted a part of her gross estate at the time of her death in 1933.  If it is held that the stock was a part of her gross estate, then it will be necessary to determine the fair market value of the stock on the date of death.  FINDINGS OF FACT.  Emily S. Perkins, the decedent, was born in Halifax, Nova Scotia, on January 25, 1863, and died intestate, a resident of Los Angeles, California, on November 8, 1933.  To her first marriage were born two sons, petitioners in this proceeding.  Her first husband, the father of the petitioners, died in 1907, leaving to her considerable property.  At the time of his death she owned a substantial amount of property in her own right.  The property thus owned by the decedent after the death of her first husband consisted*564  of business property and other real estate located in Los Angeles, beach real estate, a large ranch, cash, and securities.  *101  The decedent later married Eyre Barrow-ffrench, who died about two years after the marriage.  On June 5, 1911, she married Gregory Perkins, Jr., with whom she was living at the time of her death.  Perkins had no substantial amount of property or income, and, by a prenuptial agreement entered into between him and the decedent two days prior to the marriage, it was agreed that he should not at any time have any interest in the decedent's property except such as she might in writing convey to him and such as she might give him by will.  The agreement also provided that he would not at any time attempt to exercise any control over her property.  The decedent's first husband, prior to his death, had requested her to consult with her brother, Harold S. Keating, who lived in Dallas, Texas, with reference to all matters affecting her business or welfare.  Because of that request and the youth and inexperience of her sons, Dwight and George Whiting, she looked to her brother for advice on business matters until some time after her marriage with Perkins, *565  when Dwight Whiting began to assume some responsibilities.  At the time of her marriage to Perkins, Dwight Whiting was about twenty years of age and George was about sixteen.  Immediately following the marriage of the decedent and Perkins differences of opinion arose between them, which often developed into quarrels.  One of the principal factors in these disputes was that the decedent would not permit Perkins to manage her property.  They became estranged and separated in July of 1912.  A reconciliation was effected a short time later upon the further promise by Perkins not to interfere with the decedent's business affairs.  Difficulties again arose between them, however, and in February 1913 decedent brought a suit for divorce.  On May 16, 1913, the court entered its judgment denying the decedent's petition for divorce and the decedent appealed.  In February 1916 the action of the trial court was reversed and upon a new trial an interlocutory judgment for divorce was entered on August 1, 1916.  In the meantime certain of decedent's properties were being managed by her brother, Harold S. Keating, and her son, Dwight Whiting, under revocable trust agreements between the decedent*566  and each of these individuals.  In 1916 these trusts were revoked and by direction of the decedent the properties so held were transferred to "The Whiting Company", a California corporation, which was organized on September 14, 1916, to take over, hold, and operate the decedent's properties.  The corporation had an authorized capital stock of 50,000 shares, 49,995 of which were issued to the decedent in exchange for her properties.  The remaining five shares were issued as qualifying shares, one each to Dwight Whiting, George Whiting, Warren H. Doane, Harold S. Keating, and the decedent.  *102  Dwight Whiting was elected president, George Whiting, vice president, and Keating, treasurer.  In January 1917 Dwight Whiting was married and established his separate residence.  In February 1917 George Whiting was married and established his separate residence upon his return from his wedding trip.  The decedent, being alone, effected a reconciliation with Perkins.  Prior to the reconciliation, however, a plan was worked out whereby it was hoped that there would be no further occasion for differences between them over the management of decedent's properties.  After considerable discussion*567  with Dwight Whiting and her counsel, the decedent agreed to transfer all of her stock in the Whiting Co. to her two sons in exchange for the promise on their part to pay her an annuity of $18,000 a year, payable $1,500 monthly.  The amount of the annuity was fixed by the decedent and was the same as her previous withdrawals from the Whiting Co., which she had found to be more than ample for her needs.  On March 19, 1917, the decedent and Dwight Whiting, for himself personally, and for George Whiting, under a general power of attorney, George Whiting being absent from Los Angeles, executed a written agreement providing for the payment of the annuity above mentioned.  The instrument so executed reads in part as follows: THIS AGREEMENT, made and entered into this 19th day of March 1917, between EMILY S. PERKINS, of Los Angeles, California, first party, and DWIGHT WHITING and GEORGE NATHANIEL WHITING, of the same place, second parties, WITNESSETH: THAT WHEREAS the first party has this day sold, transferred and set over unto the second parties forty-nine thousand, nine hundred and ninety-five (49,995) shares of the capital stock, evidenced by Stock Certificate No. 6, of The Whiting Company, *568  a corporation, organized and existing under and by virtue of the laws of the State of California, in consideration of the agreement of the second parties hereinafter set forth, Now, THEREFORE, in consideration of the sale and transfer of said shares of stock to the second parties, the said second parties do hereby jointly and severally, for themselves, their heirs, executors, administrators, and assigns, promise, covenant and agree, to and with the first party, to pay to her, or to her order, * * * on or before the 10th day of each and every calendar month, from and after the date of this agreement, and for the term of her natural life, as long as she, the said first party, shall live, the sum of fifteen hundred dollars ($1,500), in lawful money of the United States of America, as and for an annuity of eighteen thousand dollars ($18,000) per annum, payable in monthly installments of fifteen hundred dollars ($1,500).  The above instrument was personally signed by George Whiting on May 10, 1917, after his return to Los Angeles.  On March 19, 1917, the date the instrument was signed by the decedent and Dwight Whiting, Perkins executed a certificate attached to the said instrument*569 *103  wherein he acknowledged that the stock referred to in the agreement was the sole and separate property of the decedent and that the annuity to be paid thereunder would be her sole and separate property.  On the same date the decedent executed an irrevocable power of attorney reciting the sale, assignment, and transfer of the stock to the petitioners and naming them her attorneys for the purpose of transferring the stock to themselves on the books of the corporation.  On the date the above instrument was executed the decedent and Perkins signed a written stipulation for the purpose of procuring a vacation of the interlocutory decree of divorce which had been entered on August 1, 1916.  The stipulation was filed of record and on March 22, 1917, the judgment was vacated and the suit for divorce was dismissed.  After the execution of the instrument of March 19, 1917, the decedent and Perkins retook their marriage vows and continued to live together until decedent's death, in 1933.  At the time of the execution of the annuity agreement, Dwight Whiting had a net worth of approximately $176,000 and George Whiting a net worth of about $223,000.  All terms and conditions of*570  the agreement of March 19, 1917, were complied with by the parties from the date of its execution up to September 12, 1917.  By that time the developments indicated that a change in the arrangement was desirable.  George Whiting had enlisted in the Navy and there was a possibility that Dwight Whiting might be drafted.  Their wives were inexperienced in business and the relationship between the wives was not particularly pleasant and friendly, indicating that difficulties might be occasioned in the management of their business affairs during their absence.  Dwight Whiting felt that the long continued absence, or disability or death of either himself or his brother, would create conditions which would operate against the best interests of the decedent and of the Whiting Co.  During the same interval Perkins had on several occasions suggested to Dwight Whiting that the property transferred to them would have brought a much larger annuity from outside interests than that which the petitioners had agreed to pay to their mother.  This caused apprehension on the part of Dwight Whiting with reference to the relations between Perkins and his mother.  He was also alarmed over the extravagances*571  of his brother George.  Because of these apprehensions a new arrangement was worked out whereby the parties to the agreement of March 19, 1917, executed an agreement in writing whereunder the said agreement was canceled and revoked.  On the same day a second agreement was executed by the parties, reading in part as follows: *104  THIS INDENTURE, made the 12th day of September 1917, by and between EMILY S. PERKINS, of the County of Los Angeles, State of California, first party, and DWIGHT WHITING and GEORGE N. WHITING, as trustees for EMILY S. PERKINS, Dwight and George N. Whiting, of the same place, second parties, WITNESSETH: That the said first party, in consideration of the sum of one dollar ($1.00) and other considerations to her passing, receipt whereof is hereby acknowledged, does, by these presents, transfer, convey, assign and set over, unto the said second parties, the survivor of them, and their successors or successor, the following decribed property, to-wit: Forty-nine thousand, nine hundred and ninety-five (49,995) shares of the capital stock of The Whiting Company, a corporation organized and existing under the laws of the State of California, represented*572  by Stock Certificate No. 6, to be held by the said second parties, the survivor of them, and their successors or successor, in trust, for the following uses and purposes, to-wit: FIRST: During the natural life of said Emily S. Perkins, the trustees or trustee hereunder shall have, hold and control all of said property, and shall have and exercise all of the rights and powers of the holder of the legal title thereof, for the purpose of managing and controlling the same, and the rights and interests evidenced and represented thereby, in such manner as to said trustees or trustee may seem for the best interests of said trust; it being understood that the said trustees or trustee, shall have the right to sell and convey any part of said property, and reinvest the proceeds in other property, or in secured loans.  SECOND: During the continuance of this trust, that is to say, during and for the whole term of the natural life of Emily S. Perkins, the said trustees or trustee shall, in the order of priority, out of the funds, and subject to the provisions, hereinafter set forth, make payments as follows: (a) To the said Emily S. Perkins the sum of $1,500 per month, payable monthly; (b) *573  To the trustees or trustee hereunder compensation as herein provided for; (c) To the said Emily S. Perkins the aggregate surplus, if any, of income, dividends, issues and profits arising and accruing from the aforesaid stock, or other trust property, remaining at the end of each calendar year, after the payment of the aforesaid sum of $1,500 per month, and the aforesaid compensation.  THIRD: So long as the said Dwight Whiting and George N. Whiting, or either of them, shall continue to act as trustees or trustee hereunder, the compensation hereinabove mentioned shall be the sum of $6,000 per year or so much thereof as shall be available out of the funds hereinafter designated * * *.  Such compensation shall be paid only out of the income from said trust property remaining after the payment of the aforesaid sum of $1,500 per month to the said Emily S. Perkins, and such compensation for any one calendar year shall be paid only out of the net income received during that year.  * * * FOURTH: In the event that the net income, dividends, issues and profits arising and accruing from said stock, or other trust property, and received by said trustees or trustee, shall be insuffcient to*574  permit the making therefrom of the aforesaid payment of $1,500 per month, to said Emily S. Perkins, and also the compensation, if any, to be paid to any incorporated trust company acting as trustee as herein provided, then and in that case the said trustees or trustee shall have the right, and it shall be their, his or its duty, to pay, from time to time, from the corpus of the trust estate, and not otherwise, as much as may be necessary to make up such deficiency in income, and to pay to said Emily S. Perkins the said full sum of $1,500 per month, and also the compensation, if any, of such *105  incorporated trust company, and, to that end, from time to time, to sell, collect or hypothecate so much of the aforesaid property, as may be necessary to enable them, him or it to pay in full the aforesaid monthly sum of $1,500, and any compensation of any such incorporated trust company.  FIFTH: Upon the death of said Emily S. Perkins this trust shall wholly terminate, and said property, and all property into which it may have been converted, shall thereupon vest absolutely in Dwight Whiting and George N. Whiting, share and share alike, or, in the event of the prior decease of them, *575  or either of them, the share of each such deceased person shall immediately vest absolutely in such person, or persons, as he shall have designated by will, or, in the absence of such testamentary disposition, in the heirs of such deceased person, by right of representation.  * * * There is hereby given to the trustees or trustee hereunder, during the continuance of the trust hereby created, full and complete authority to manage and control the aforesaid trust property, to collect and receive all dividends or distributions of capital thereon, to sell and convey any part thereof, and to invest and reinvest, loan and reloan, the funds coming into their, his or its hands, which are a part of the corpus of said trust property, or in secured loans, which shall thereupon be subject to the trust hereby created.  And the said trustees or trustee shall not be entitled to any compensation for services in the performance of duties hereunder, other than, or in addition to, the compensation herein directed to be paid to such trustees, or trustee.  George Whiting also executed a document whereby he relinquished to Dwight Whiting his rights as trustee under the above instrument.  This relinquishment*576  continued in effect until February 1, 1932, when George Whiting became cotrustee with his brother, who had continued up to that time as sole trustee.  The above documents were all actually signed on October 6, 1917, although they show on their face the date of September 12, 1917.  From and after September 12, 1917, the entire earnings of the corporation were declared as dividends and this amount, less the compensation for services as trustees, was paid to the decedent up to the time of her death.  The net income of the corporation from the date of organization in September 1916 through 1934, after all charges except executive salaries, was as follows: 1916 (3 1/2 months)$11,773191761,468191859,631191964,505192071,017192169,283192267,9451923$82,444192495,814192589,024192691,5611927102,7151928113,9971929101.3881930$80,027193174,141193243,381193350,205193431,797After the agreement of September 12, 1917, until 1934, Dwight Whiting received no salary as an executive of the corporation, but continued to draw $6,000 per year as compensation for serving as trustee.  In 1934 his salary from the*577  Whiting Co. was $18,000.  The *106  fair market value of the assets of the Whiting Co. on September 12, 1917, was $1,026,710.11.  About 1904 or 1905 the decedent had an operation and remained in the hospital for two or three weeks.  She thereafter completely recovered from the operation.  When she was having domestic difficulties prior to her separation from Perkins she developed a nervous condition, which began to improve immediately following the separation. She had no other illness of importance until the last, which caused her death.  The decedent was of a cheerful and intellectual type.  She was alert both mentally and physically.  She was active in church affairs and did a great amount of charity work.  At the time of executing the instruments of March 19 and September 12, 1917, she was 54 years of age and was in the best of health and spirits.  She maintained and drove her own automobile.  Decedents's death was caused by sarcoma of the neck, a malignant form of cancer, which was first noticed about a year prior to her death.  This ailment was not diagnosed as sarcoma until January 1933.  The transfer or the transfers of the stock of the Whiting Co. by the decedent*578  to Dwight Whiting and George N. Whiting were not made in contemplation of death.  In determining the deficiency here involved, the respondent determined that the 49,995 shares of stock in the Whiting Co. were transferred by the decedent to the petitioners under the trust agreement of September 12, 1917, that the value of such shares on the date of the decedent's death was $1,511,848.80, and that that amount was to be included in her gross estate under the provisions of section 302(c) of the Revenue Act of 1926, as amended by section 803(a) of the Revenue Act of 1932.  OPINION.  TURNER: The first question presented for our determination is whether or not the respondent erred in including 49,995 shares of common stock of the Whiting Co. in decedent's gross estate.  If we find that the stock was properly included, it will then be necessary to determine the fair market value of the stock at the date of decedent's death.  It is the contention of the petitioners that under the agreement of March 19, 1917, they acquired from the decedent all of her right, title, and interest in and to the stock of the Whiting Co.  They further contend that nothing passed from the decedent to them*579  under the agreement dated September 12, 1917, but rather that they gave to her, in place of the annuity of $18,000 per year, the income from the stock for life, which based on experience and future prospects, would *107  greatly exceed the annuity.  If these contentions are sound, no interest in the Whiting Co. passed from the decedent at or by reason of her death, and the respondent erred in including the said stock in her gross estate.  It is the contention of the respondent that the agreement of March 19, 1917, was never carried out; that the decedent never at any time delivered the stock of the Whiting Co. in accordance with its terms; that, in any event, the agreement of March 19, 1917, having been revoked, the stock belonged to the decedent at the time the trust agreement of September 12, 1917, was executed; and that the transfer there made falls within the provisions of section 302(c) of the Revenue Act of 1926, as amended by section 803(a) 1 of the Revenue Act of 1932, and the stock so transferred constitutes a part of the decedent's gross estate by reason of that section of the statute.  It is further contended that even though it be said that the instruments of March*580  19 and September 12, 1917, were effective to transfer all interest of the decedent in the stock of the Whiting Co., these transfers were made in contemplation of death and for that reason the statute requires that the stock be included in her gross estate.  *581  Considering the contentions of the parties in reverse order, the facts definitely and clearly show that none of the transfers in question were made in contemplation of death.  The motive which prompted them was the desire of the decedent to arrange her business affairs so that she and her husband might resume married life free from disputes, differences, and quarrels such as were previously experienced by them.  Contemplation of life rather than contemplation of death prompted the transfers.  By the terms of section 302(c) as amended, supra, a transfer by trust or otherwise is to be included in the gross estate of the decedent grantor where the possession, enjoyment, or the right to the income from the property so transferred is retained for the grantor's life, or where the right is retained, either alone or in conjunction with any person, to designate the person who shall possess or enjoy the property or the income therefrom.  Reading the instrument of *108  September 12, 1917, it is apparent that the decedent in the instant case retained no right, either alone or in conjunction with any person, to designate the persons to possess or enjoy the property or the income*582  therefrom.  That designation was made at the time of the execution of the instrument itself and no such right was retained.  Assuming, however, that the agreement of March 19, 1917, was not carried out or that it was revoked and the stock revested in the decedent, it does appear that the decedent did retain, under the trust instrument of September 12, 1917, the right to the income from the stock during her life, a fact which bring the transfer within the language of section 302(c) as amended.  It is this provision on which the respondent relies to sustain his position with reference to the transfer to trust.  It is not contended that the decedent had any right to revoke the trust so made.  Prior to March 3, 1931, section 302(c) of the Revenue Act of 1926 contained no specific provision for the inclusion in the gross estate of property transferred in trust where the decedent retained only the right to the income from the property for life.  That section did provide for the inclusion of property so transferred when the transfer was to take effect in possession and enjoyment at or after death, and in administering the 1926 Act and prior acts the respondent treated transfers whereby*583  the grantor retained the right to the income from the property for life as transfers intending to take effect in possession or enjoyment at death.  In Burnet v. Northern Trust Co.,283 U.S. 782">283 U.S. 782, and Morsman v. Burnet,283 U.S. 783">283 U.S. 783, the Supreme Court, on authority of May v. Heiner,281 U.S. 238">281 U.S. 238, rejected that interpretation of the statute and held that property irrevocably transferred to trust with only a reservation by the grantor of the income for life did not constitute a part of the grantor's estate at death.  On March 3, 1931, the day after these decisions by the Supreme Court, Congress adopted a joint resolution amending section 302(c) of the Revenue Act of 1926 to specifically cover such transfers, and later, by section 803(a) of the Revenue Act of 1932, amended the said section to its present form.  Our question, then, is whether or not section 302(c), supra, as amended, relates back and covers transfers made prior to the dates of the amendments in cases where the death of the decedent does not occur until after the amendment dates.  The answer to that question can be drawn from the decision of the Supreme*584  Court in Helvering v. Helmholz,296 U.S. 93">296 U.S. 93. There the Court had before it the interpretation of section 302(d) of the Revenue Act of 1926, which deals with the power to revoke, alter, or amend a trust instrument.  The provisions there dealt with first appeared in the Revenue Act of 1924.  The transfer under consideration was made in 1918.  The *109  Court, after pointing out that the transfer was complete at the time of the creation of the trust, that no interest remained in the grantor, and under the revenue act then in force the transfer was not taxable as intended to take effect in possession or enjoyment at the death of the grantor, held that if "section 302(d) of the Act of 1926 could fairly be considered as intended to apply * * * its operation would violate the Fifth Amendment." See also White v. Poor,296 U.S. 98">296 U.S. 98. Cf. Helvering v. City Bank Farmers Trust Co.,296 U.S. 85">296 U.S. 85. We are unable to draw a distinction between the application of section 302(d) in the above cases and section 302(c), as amended, in the instant case.  *585 Jerome C. Smith v. United States,16 Fed.Supp. 397. Cf. Bingham v. United States,296 U.S. 211">296 U.S. 211; Industrial Trust Co. v. United States,296 U.S. 220">296 U.S. 220; Nichols v. Coolidge,274 U.S. 531">274 U.S. 531. It is contended by the respondent, however, that the decedent did not divest herself of legal title to the stock of the Whiting Co by the trust instrument of September 12, 1917, and that she did not part with the title until the date of her death.  He further contends that by the terms of the instrument the remainder over did not vest in the petitioners as beneficiaries upon the execution of the trust instrument, but vested at the time of decedent's death.  In support of these contentions respondent points to the first paragraph of the instrument, which provides that the trustees, or trustee, "shall have, hold and control all of said property, and shall have and exercise all of the rights and powers of the holder of the legal title thereof, for the purpose of managing and controlling the same * * *", and to the fifth paragraph of the instrument, which provides for termination of the trust upon the death of the decedent*586  and, upon such termination, that the "said property and all property into which it may have been converted, shall thereupon vest absolutely in Dwight Whiting and George N. Whiting, share and share alike, or, in the event of the prior decease of them, or either of them, the share of each such deceased person shall immediately vest absolutely in such person, or persons, as he shall have designated by will * * *." It is argued that the language of the first paragraph clearly shows that the decedent intended to and did retain the legal title to the stock of the Whiting Co. until the date of her death and in effect that she merely appointed Dwight Whiting and George N. Whiting as agents to manage the property for her.  In our opinion this contention can not be sustained.  The property involved was personal property.  The whole purport and tenor of the agreement was that the petitioners here should receive the property as trustees.  The language quoted indicates that they were to "have and exercise all of the rights and powers of the holder of legal title." *110  It was also provided that they were to have the right to sell and convey any part of the property.  These provisions clearly*587  indicate the presence in the trustees of the legal title.  The decedent parted with everything that she had, in so far as the stock of the Whiting Co. was concerned, except a right to the income during her life.  Cf. Tait v. Safe Deposit Trust Co. of Baltimore, 74 Fed.(2d) 851. With reference to the language contained in the fifth paragraph of the trust instrument to the effect that the property should vest absolutely in Dwight Whiting and George N. Whiting upon the death of the decedent, the argument of the respondent is definitely answered in Kinney v. Commissioner, 80 Fed.(2d) 568, affirming 30 B.T.A. 604">30 B.T.A. 604. That was a California case and the trust instrument contained language almost identical with that contained in the fifth paragraph of the trust instrument in the instant case.  After reviewing the California statutes and court decisions it was held that the remainder vested at once in the beneficiaries.  The court further stated: "There were persons in being who could take, under the terms of the instrument, upon the ceasing of the precedent interest, which brings the matter in controversy under the code provision defining*588  vested estates.  Moreover, there was no contingency directly (or indirectly) expressed, which could defeat the vesting of the interests." It is thus apparent that Dwight Whiting and George N. Whiting received a vested remainder in the trust property at the time of the transfer under the trust instrument in 1917 rather than at the date of the decedent's death.  In reaching the foregoing conclusion we do not overlook the provision in the trust agreement of September 12, to the effect that in event the income of the trust was insufficient for the payment to the decedent of $1,500 monthly, the trustees were authorized and were under a duty to pay the deficiency from the corpus.  The evidence indicates that at the time of the creation of the trust it appeared that the future annual income would be greatly in excess of the payment to be made to the decedent, as actually proved to be the case, for every year thereafter down to the time of her death.  Under these circumstances the possibility of an invasion of the corpus was too remote and improbable to be of any significance here.  Cf. *589 Ithaca Trust Co. v. United States,279 U.S. 151">279 U.S. 151. It is apparent from the foregoing that it is not necessary to discuss or consider the effect of the instrument of March 19, 1917.  Even though it be said that the decedent parted absolutely with the stock of the Whiting Co. on March 19, 1917, and, regardless of whether or not she reacquired it upon revocation of the March agreement, she definitely and finally parted with any interest that she might have had under the trust instrument of September 12, 1917, except a right *111  to the income for life.  The right to the income was obliterated at her death and nothing was left which passed from her to the petitioners or any other living person in so far as the stock of the Whiting Co. was concerned.  The trust instrument was irrevocable and she retained no power thereunder by which she could recall at any time during her life any portion of the property conveyed.  It was error to include the stock of the Whiting Co. in the decedent's gross estate.  Reviewed by the Board.  Decision will be entered for the petitioners.Footnotes1. SEC. 803. (a) Section 302(c) of the Revenue Act of 1926, as amended by the Joint Resolution of March 3, 1931, is amended to read as follows: "(c) To the extent therein of which the decedent has at any time made a transfer, by trust or otherwise, in contemplation of or intended to take effect in possession or enjoyment at or after his death, or of which he has at any time made a transfer, by trust or otherwise, under which he has retained for his life or for any period not ascertainable without reference to his death or for any perid which does not in fact end before his death (1) the possession or enjoyment of, or the right to the income from, the property, or (2) the right, either alone or in conjunction with any person, to designate the persons who shall possess or enjoy the property or the income therefrom; except in case of a bona fide sale for an adequate and full consideration in money or money's worth.  Any transfer of a material part of his property in the nature of a final disposition or distribution thereof, made by the decedent within two years prior to his death without such consideration, shall, unless shown to the contrary, be deemed to have been made in contemplation of death within the meaning of this title." ↩