Fondren v. Commissioner
324 U.S. 18 (1945)

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U.S. Supreme Court

Fondren v. Commissioner, 324 U.S. 18 (1945)

Fondren v. Commissioner

No. 88

Argued December 11, 12, 1944

Decided January 29, 1945

324 U.S. 18

Syllabus

1. Irrevocable trusts for the benefit of minors provided for distribution of specified percentages when the beneficiaries reached the ages of 25 and 30 and of the remainder when they reached 35. The trustee was authorized to apply income and corpus toward maintenance and education of the beneficiaries if, contrary to expectations, necessity therefor should arise. Held, that gifts to the trusts were gifts of "future interests in property," within the meaning of § 504(b) of the Revenue Act of 1932 and Treasury Regulations 79, so that the $5,000 exclusion prescribed by that section was not allowable. P. 324 U. S. 24.

2. To bring the statutory exclusion into force, it is not enough that the donee has acquired vested rights; he must have the right presently to use, possess, or enjoy the property. P. 324 U. S. 20.

3. The fact that the beneficiary is specified and in esse, or that the amount of the gift is definite and certain, does not render the statutory exclusion applicable where enjoyment of the property is postponed. P. 324 U. S. 26.

4. Section 504(b) makes no distinction between gifts for the benefit of minors and gifts to adults. P. 324 U. S. 28.

5. It does not follow from the result here reached that the statutory exclusion would not be applicable in any case to gifts for the benefit of minors. P. 324 U. S. 29.

6. A settled construction of a statute which Congress has reenacted should be followed. P. 324 U. S. 29.

141 F.2d 419 affirmed.

Certiorari, 323 U.S. 685, to review the affirmance of a decision of the Tax Court, 1 T.C. 1036, sustaining the Commissioner's assessment of a deficiency in gift taxes.

Page 324 U. S. 19

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